In Q2 2022, Fintech companies globally “raised $24.1 billion in venture capital (VC) across 1,103 deals, representing a 17.8% decrease in quarter-over-quarter deal value,” according to a report from Pitchbook.
This is “the largest percentage drop in deal value since Q3 2018,” the team at Pitchbook revealed while adding that payments companies “continue to lead the largest portion of deal value, at $7.6 billion, yet this sum was 18.7% lower than the $9.3 billion in Q1.”
Ramp, an expense management platform, “raised the largest round of the quarter in the segment, a $748.3 million Series C at an $8.1 billion post-money valuation.”
Other notable payment deals of the quarter “include point-of-sale software and hardware developer SumUp (a $626.6 million late-stage round at an $8.5 billion valuation), two rounds from application programming interface (API)- based payments companies: Scalapay, which raised a $524.0 million Series B, and GoCardless, which raised a $312.0 million Series G at a $2.1 billion post-money valuation.”
Alternative lending also “had a strong quarter, raising $4.7 billion across 176 deals.”
These deals “include a $306.0 million Series A for Italian software-as-a-service (SaaS) financing platform Bloom, a $270.0 million Series C at a $750.0 million valuation for Indian-based consumer lender Stashfin, and a $170.0 million Series B for commercial real estate financing platform Lev.”
Financial services IT and Regtech companies “had the largest VC investment increase during the quarter, up 83.8% and 3.2%, respectively.” These fundraises support their view that fintech companies “with contract-based recurring revenues from enterprises, banks, and other financial institutions will likely thrive in the current environment.”
During the quarter, the median pre-money valuation for VC-backed, late-stage fintech companies “decreased 40.6% to $153.0 million from Q1’s $257.5 million.”
This is roughly “a flat valuation compared to 2021’s full-year figure of $151.3 million.”
For more details on this update check here.
As covered in June 2022, AI and machine learning (ML) focused VC investment slumped in line or consistent with the market but retained “resilient valuations” as the market sorts through the fallout from the recent technology crash.
As noted in an update shared by Pitchbook, funding “slumped 21.1% QoQ to $23.9 billion yet remained in line with quarters prior to Q4 2021.”
Median late-stage valuation “rose 11.1% from $90.0 million in 2021 to $100.0 million in Q1 2022, in line with the broader market.”
As noted in the update from Pitchbook:
“VC funding was driven by healthcare, autonomous vehicles, and natural technologies including Conversational AI and NLP. We tracked a record $1.5 billion deal value for quantum AI startup SandboxAQ in its spinout from Google. Most of the 70 categories we track are on pace to decline in funding this year, with notable exceptions including accounting automation, autoML, genetic analytics, and supply chain optimization.”