Fintech funding falls back in 2023

Global fintech funding fell 60.8 per cent in the second quarter of 2023, compared with the same period in 2022, according to research.

In total $10.5bn of funding was recorded by FT Partners, compared with $26.8bn in the previous year.

The three months to the end of June were the lowest funding levels for fintech since Q2 2020, the first full period capturing the effect of the global pandemic.

After this inital slow down funding began to accelerate until last year when a rising rate environment prompted a slow down.

Stripe’s $6.5bn Series I funding round back in March 2023, raised despite the company saying it did not need the funds operationally, had provided a much-needed boost to the fintech market's over all figures.

It nudged up fintech financing back to levels seen before the Russian invasion of Ukraine, and its associated macroeconomic issues.

However,  given its unusual nature and size looking again at the figures shows both Q1 and Q2 weres both low, with the latter 6 per cent lower.

FT Partners notes that deal activity volume across financing, M&A and IPOs increased sequentially in Q2 2023, Fintech has previously seen six straight quarters of decline.

This was primarily driven by an uptick in $1bn+ M&A deals. 

Moreover, momentum around FinTech M&A appears to be continuing into Q3 as more than half of all $500 million+ deals in 2023 YTD have been announced in June and July.