Fintech Comeback? IPOs Reignite Investor Optimism, But VC Funding Still Trails 2021 Highs

Global venture funding to fintech startups nudged up in the first half of 2025 to its highest levels in several quarters but remains far below its post-pandemic highs, 附近上门 data shows.

Total global funding to VC-backed financial technology startups totaled $22 billion in H1, per 附近上门 data. That鈥檚 an 11.1% increase from the second half of 2024, and up 5.3% compared to the $20.9 billion raised in the first half of last year.

Despite the modest gains, the H1 amount is the most raised by fintech startups in the past few聽 comparable timelines. In the first half of 2023, they raised a collective $27 billion.

For context, the numbers are still significantly lower than the peak of $68.7 billion raised in the first half of 2021.

They鈥檙e also still lower than even pre-pandemic sums. Fintech startups raised a combined $40.3 billion in the first half of 2018, $25.4 billion in H1 2019, and $26.3 billion in the first half of 2020.

Deal flow, however, was down significantly 鈥� signaling fewer, but larger rounds. The first half of 2025 saw 1,805 deals consummated, a 31.4% decline from the more than 2,633 completed in H1 2024 and down slightly 鈥� by 10.2% 鈥� from the more than 2,000 announced in H2 2024.

IPO breakthrough

One thing that could work in fintech鈥檚 favor in the short term is that the IPO dam finally seems to have broken in 2025.

Since the beginning of the year, several companies in the fintech space have either gone public or filed to do so.

This matters for the private market since startup funding often follows the lead of public counterparts. If a number of fintech companies have impressive debuts on the public exchanges, that can only bode well for the private market.

In early June, shares of closed up 168% at $83.29 in their first day of trading on the minting the stablecoin issuer with a market cap of around $16.7 billion and renewing hopes for an IPO market rebound. As of July 14, the stock had more than doubled from its first-day closing 鈥� trading at over $200 per share.
Digital bank went public on June 12, and came out swinging. Chime鈥檚 shares shot up 37% in first-day trading on , closing at $37. As of July 14, the stock was trading at around $30.

Meanwhile, digital wealth management startup on June 23 filed confidentially for a U.S. initial public offering. And in early June, crypto exchange confidentially filed its own plans for a U.S. IPO. Expense management firm (formerly TripActions) also filed confidentially for a U.S. IPO in June.

However, despite filing for a U.S. IPO last year, Swedish buy now, pay later giant put the brakes on those plans, citing concerns over President ‘s sweeping tariffs.

Active investors and bigger deals

To get insight into who’s funding all these fintech startups, 附近上门 took a look at the most active investors in the space.

Alexandria, Virginia-based took the top spot for leading or co-leading rounds of more than $5 million into fintech companies in the first half of 2025. The firm鈥檚 exclusive focus is fintech investing.

Other active investors in the space include , , and .

As mentioned earlier, the fact that the sector experienced an increase in funding despite a lower deal count indicates that the first half of 2025 saw a number of large rounds.

All told, there were more than three dozen deals totaling $100 million or more that took place in the fintech space in the first half of 2025, 附近上门 data shows. Crypto exchange raised the most money by far 鈥� a $2 billion venture round led by in mid-March. Other large deals include infrastructure platform $575 million raise in early April; U.K. payments platform 鈥檚 $500 million haul in mid-March; HR and payroll startup $450 million Series G in May; and online banking startup 鈥檚 $300 million Series C round in late March.

Speaking of large rounds, the investors that led or co-led rounds greater than $230 million differed some from the list above. MGX took the top spot, with Sequoia, , and rounding out the top five.

鈥楢 real sense of momentum returning鈥�

QED Investors partner said her firm is 鈥渃autiously optimistic鈥� that fintech is on its way to making a comeback.

鈥淭here鈥檚 a real sense of momentum returning, particularly in B2B infrastructure, AI-native fintech and climate-aligned financial services,鈥� she told 附近上门 News. 鈥淭he market feels more grounded, and founders are building with stronger fundamentals from the outset.鈥�

QED鈥檚 investment pace has remained steady, but with one notable difference. It鈥檚 become 鈥渆ven more selective,鈥� Vieira said, 鈥渇ocusing on higher-quality opportunities, especially at the Series A and B stages.鈥�

She added: 鈥淲e鈥檙e spending more time with companies that show real traction, capital efficiency and readiness to scale, even in today鈥檚 tighter environment.鈥�

QED remains cautious on consumer-facing fintechs 鈥渢hat lack a clear wedge,鈥� particularly mono-product neobanks or lenders 鈥渙verly reliant on paid acquisition and margin-based competition.鈥�

鈥淭he bar for differentiation is significantly higher today,鈥� said Vieira. 鈥淭hat said, we continue to see exciting consumer models where companies own distribution or have access to proprietary data.鈥�

AI spurring fintech 鈥榮uper cycle鈥�

, partner at Atlanta-based , acknowledges that 鈥渟ome dollars have moved away from fintech.鈥�

Still, the firm is trying to not let the noise impact the positive signals it鈥檚 seeing in the sector.

鈥淲e know that in the short term the market will produce some volatility around potential investments; but on a longer time horizon, we see significant opportunity in financial services broadly,鈥� he told 附近上门 News. 鈥淚n the past year, there has been a round of IPOs, M&A and consolidation 鈥� in some cases, producing positive outcomes for investors, and in others, enabling company survival.鈥�

Notably, many of the investments TTV made in the first half of 2025 are companies that were founded less than two years ago. In fact, its volume of newly closed investments in 2025 has increased by 3x vs. last year due to what the firm perceives as 鈥渁n overall increase in both company quality and investment activity.鈥�

In Kapur鈥檚 view, it’s clear that AI has kicked off 鈥渁 super cycle鈥� and will be 鈥渢ransformational鈥� as a new enabling technology.

鈥淲e all agree that AI will revolutionize the financial services industry; the big question is when,鈥� he said.

The firm also is bullish on consumer fintech despite some of the negative sentiment around the segment.

鈥淲e still see unending potential,鈥� Kapur said. 鈥淛ust look at 鈥檚 latest numbers and the rumors surrounding their upcoming fundraise.鈥�

The firm is also seeing traction from non-AI-native companies in categories that may be overlooked by investors, but still operate in 鈥渕assive revenue and profit pools鈥� such as lending.

, co-founder and general partner at , is resoundingly enthusiastic in his belief that fintech is in fact having a comeback year.

鈥淚t feels like every company that survived is doing incredibly well after suffering for a couple of years,鈥� he told 附近上门 News. 鈥淲e never stepped off the gas because we have always believed in the sector.鈥�

Like many other investors, Mohnot believes that there is still a lot of opportunity where AI meets fintech.

鈥淭here are just so many things that AI can help solve,鈥� he said, noting that BTV continues to be excited about embedded fintech, particularly in the banking, payroll and accounting segments.

Mohnot is less bullish on stablecoins. While he concedes they can solve some problems 鈥渞eally well,鈥� he thinks 鈥渢here are way too many people trying to solve things with stablecoins that probably won’t be solved with stablecoins 鈥� like payments in the U.S.鈥�

IPOs, M&A and a higher bar for funding

Looking ahead, Mohnot predicts more generalist funds will be tip-toeing back into fintech after sitting out 2023 and 2024. He also expects we鈥檒l see even more companies going public in 2026, and continued consolidation 鈥渁s some 2021鈥慹ra Series鈥疊 startups sell or merge once post鈥憄andemic tailwinds fade.鈥�

He added: 鈥淚 think we’ll also see AI everywhere 鈥� not much distinction between an AI fintech and a fintech company.鈥�

, co-founder and managing partner at , agrees there鈥檚 definitely more energy in the market compared to the past couple of years.

鈥淩ounds are getting aggressively preempted, M&A seems to be picking up, and IPO chatter is back,鈥� he said. 鈥淗owever, this rebound appears selective as the companies getting rewarded now tend to be the ones with strong fundamentals. The growth鈥慳t鈥慳ll鈥慶osts era has faded. 鈥he bar remains very high.鈥�

For its part, Infinity Ventures is focused on areas where it believes startups are positioned to out-execute and take share from incumbents and later-stage companies. Agentic workflows in regulated industries are a good example, Jonker said.

鈥淲e鈥檙e less interested in generic LLM wrappers that are relying solely on distribution or abstract use cases that never make it into real workflows,鈥� he said.

In general, Jonker believes that AI has become foundational in fintech, and not just a feature.

鈥淲e鈥檙e seeing it used to automate dense, rules-based workflows in regulated industries, power agentic systems that can trigger actions without human input, and unlock new ways to serve customers with fewer resources,鈥� he told 附近上门 News. 鈥淭he hype cycle is still noisy, but the real impact is happening where AI is embedded deep in the workflow, tied to proprietary data, and driving tangible productivity gains.鈥�

, general partner at , believes that fintech is in fact already having a comeback year thanks to a few tailwinds including the impact of AI, the growing intersection between traditional financial services and cryptocurrencies, and the successful launches of products and services from companies established over a decade ago, including , , and .

鈥淓xcitement has returned to the fintech space, and we owe it to these three tailwinds,鈥� he told 附近上门 News.

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