附近上门

Global funding to private companies in financial services 鈥� a leading sector for investment 鈥� has slowed significantly in the past five quarters.

In the second quarter of 2024, financial services companies raised $9.7 billion, up a bit year over year and up 17% quarter over quarter from the $8.3 billion invested in the sector in the same quarter in 2023.

However, funding for the past quarter was down 75% from the market peak of Q2 2021, when more than $40 billion was invested.

Over the past five quarters, funding to financial services companies trailed below $10 billion each quarter, based on an analysis of 附近上门 data. These five quarters show the lowest funding amounts to the sector since Q1 2017, which saw $9.3 billion in funding.

While every sector was down from the funding heights of 2021, financial services has shown a greater decline since the slowdown. By comparison, overall global funding this past quarter was down 59% from the peak quarter in 2021.

Investor outlook

We caught up with from , a firm with a number of fintech portfolio companies that went public in 2021, including , , and .

Morris acknowledges that it has been hard to be optimistic the past three years, as companies missed revenue targets and focused on cost-cutting to get in shape.

However, having gone through austerity, there are six to eight fintech companies with the capability to go public should they decide to, he said. Morris also anticipates a more active M&A market, with leading fintechs seeking to expand products or geography as well as companies merging to become larger players.

Looking forward, is an area with a lot of potential, as seen already in the buy now, pay later lending model, Morris said.

鈥淭he economic moats in business are going to wrap around bill payments, insurance and lending,鈥� he said.

Fintech unicorns

Financial services is the leading sector for unicorns, based on an analysis of 附近上门 data, with over 390 companies on The 附近上门 附近上门. These include from China, as well as payments company , and neobanks and . Those last three fintech companies could look to list in the coming year.

Despite the slower funding environment, there are a number of fintechs that missed the IPO window in 2021 and have spent the last two years refactoring their businesses.

Stripe claims it in 2023, and Revolut鈥檚 2023 revenue , with an increase of 12 million new customers.

鈥淭he truth is, the banks find it difficult to satisfy their customers,鈥� Morris said. 鈥淭hey’ve got legacy technology, they don’t have the kind of verve that a lot of the fintechs have. So it’s a really interesting David and Goliath battle that’s going on and we’re just in the beginnings of it.鈥�

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• Forecast: 15 Companies We Think May Actually, Really, Finally, Maybe Go Public In 2024

Methodology

The data contained in this report comes directly from 附近上门, and is based on reported data. Data reported is as of July 21, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Financial services is a broad industry group including banking, insurance, lending, payments, virtual currency and wealth management.

Industries in 附近上门 are not exclusive. A company can be in more than one industry and in more than one industry group.

Please note that all funding values are given in U.S. dollars unless otherwise noted. 附近上门 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to 附近上门 long after the event was announced, foreign currency transactions are converted at the historic spot price.

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