Fintech

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Introduction

Fintech is the biggest VC investment category ahead of health, enterprise software, energy and transportation. Over $420B in VC funding has gone into fintech startups since 2016, and more than $1.1T of exit value has been created in the same period.
Fintech startups are now worth over $3T, with 2/3 of the value still private.

Fintech startups raised $82B globally in 2022, down 36% from last year but still almost double the pre-pandemic level.
Zooming out, fintech VC investment increased by 24x within the last decade.

Fintech sub-industries

Fintech is defined as the intersection between finance and technology. In our definition of fintech, we also include insurtech, crypto & defi and fintech-oriented regtech.
We do not include companies that serve finance as one of several industries.
Looking back to 2016, mortgages & lending was the largest segment together with payments, while crypto & defi was just nascent. Fast forward to 2022, crypto & defi is now the largest segment with payments, while mortgages & lending has shrunk significantly.
Change the yearly view below to see the evolution of fintech segments in time.

Comparison with other industries

The share of total VC funding going to Fintech has more than doubled within the last ten years, from just above 8% to a peak of 19% in 2021. In 2023 so far in Q1, the share is just below 17%.

Fintech has been the top investment sector ahead of health in 2022 and is still one of the fastest growing in the last 24 months. However, fintech funding dropped more than the average for the VC market in the last 12 months.

Looking at 2023 so far, Fintech has been the most invested industry, behind enterprise software (driven by OpenAI and the rest of generative AI), with over $14B in funding. This is, however, a 60% drop from last year, slightly more than the 51% of the overall market.

Quarterly investments

Fintech startups attracted over $14B in VC funding in Q1 2023. This is far from 2021 levels but more than the last two quarters. Fintech funding is on track to surpass 2020 while falling short of 2021 and 2022.

Enterprise value

Fintech startups are now worth $3.4T, with nearly 2/3 of the value still private. Public fintech valuations have dropped significantly from 2021 to 2022, erasing almost ~$0.7T of market cap, while the combined private valuation is still growing albeit slowly.

Unicorns

Unicorn creation dropped strongly from a peak of over 40 unicorns quarterly in 2021 to just 2 in Q1 2023. Fintech is still the leading industry by unicorns created.

Exits

Public listings (IPOs and SPACs) dropped significantly after the outlier year of 2021, both in combined value and count.
M&A is the most common exit route by count and reached its highest activity ever in 2022.

Investment by stage

Early-stage fintech funding nearly tripled from 2016 to 2021-2022. The last quarters, Q2 2022 and Q1 2023, also show a drop at the early stage. However, figures will likely rise slightly due to some reporting lag on smaller rounds.

Breakout-stage fintech funding grew 4x from 2016 to 2021. A more substantial drop in funding is present than in the early stage, with Q1 2023 closing at levels seen in 2018 and showing a 3x decline from last year.

Late-stage fintech funding spiked in 2021 with over $80B in funding, a four-time increase from 2020. Late-stage pulled back the most (the rebound in Q1 2023 is due to Stripe's $6.5B mega-round)

Looking at it all together, the share of mega-rounds has increased from just 20% in 2012 to over 50-60% in 2021-2023.

Top fintech investors

We’ve ranked the top VC investors based on the number of investments they’ve made into fintech startups (the number one investor is indexed to 100).
You can filter the table by preferred first round to see the top investors at different stages. By clicking on the investor's name, you can also see their complete portfolio on Dealroom.

Fintech segments & tags

Looking at business models in fintech. B2B SaaS startups attracted the most funding in 2023. Overall, B2C share in fintech has constantly been shrinking since 2016 from over 50% to just above 30% in 2022.

Payment startups have attracted the largest share of funding in 2023 (updated until Q1 2023), even if 75% of this came from Stripe mega-financing.
Change the yearly view below to see the evolution of fintech segments in time.

Zooming into specific trends, change the yearly view and select the sub-industry of interest to see the evolution of fintech segments in time.

Top countries and cities

The US has been the leading VC market for fintech, notably followed by the UK, which pushes above its weight, and India. France, Singapore and Indonesia have been the fastest-growing countries in the last 12 and 24 months.

London surpassed the Bay Area to gain the top spot in 2022, and NYC comes a close third.
Paris, Chicago, Singapore and Berlin have been the fastest-growing hubs in the last 12 and 24 months.

Top fintech startups

Top 100 fintech startups to watch ranked by Dealroom signal.
The Dealroom Signal is a proprietary predictive algorithm to discover the most promising companies. The input for each Signal's algorithm includes company growth (team size, product growth), founders' strength, completion score and contextual data (does the company fit into segments of interest), timing (is the startup likely to raise their next round soon) and team composition.

Partners

Related content

Reports: Fintech 2022 report
Reports: The Rise of Embedded Finance
Reports: The State of European Insurtech 2022 
Reports: European Crypto report 2023
Fintech curated content
Fintech definitions: Learn how Dealroom defines fintech here.