Tracxn, a global SaaS-based market intelligence platform, has released its Geo Quarterly FinTech US Report – 2023.
The report, based on Tracxn’s extensive database, “provides insights into the US FinTech space.”
The US is “home to more than 30,000 FinTech startups, making it the largest startup ecosystem globally in the FinTech space.” The total funds “raised in Q1 2023 by the US FinTech startups accounted for more than 65% of the funds raised in the FinTech space globally.”
US FinTech startups “raised a total of $8.8 billion in Q1 2023, which is 25% lower than Q1 2022 and a 173% rise from Q4 2022.” This is primarily “due to a sharp jump of 414% in late-stage funding from $1.4 billion in Q4 of 2022 to $7.2 billion in Q1 2023, and an increase of 10% compared to Q1 of 2022.”
The majority of the funding in this stage was “raised by digital payments company Stripe, which alone raised $6.5 billion in a Series I round in January 2023.”
Early-stage funding was “the most impacted, decreasing 70% this quarter when compared with Q1 2022, and falling 7% from Q4 2022.” This sector “witnessed seed-stage investments worth $294 million in Q1 2023, 56% lower than the amount raised in Q1 2022, and 26% lower than the corresponding quarter last year.”
Due to San Francisco-based Stripe’s funding round, $7.25 billion “was raised in January 2023 alone, a rise of 75% from January 2022.”
Payments, Investment Tech, and Banking Tech “were the top-performing segments in Q1 2023, with companies in the Payments space accounting for more than 75% of the total funds raised in the overall sector.”
It was “an uneventful quarter for the US FinTech space in terms of IPOs and Unicorns.”
NFT Gaming Company, “a platform offering NFT-based play-to-earn gaming economy, was the only IPO observed in Q1 2023.” Liquidity Group, a business loans platform “was the only new entrant to the Unicorn club in Q1 of 2023, compared with 18 Unicorns in Q1 of 2022.”
51 acquisitions “took place in Q1 2023, a small change from 58 acquisitions in Q4 of 2022. Duck Creek was acquired by Vista Equity Partners at an acquisition price of $3 billion, and Power was acquired by Marqeta for $223 million.”
Y Combinator, Andreessen Horowitz and Techstars are “the most active investors in the US FinTech startup ecosystem.” The top seed-stage investors “in the US are Y Combinator, Susa Ventures and Calm/Storm, while the top early-stage investors are Commerce Ventures, Correlation Ventures and AME Cloud Ventures.”
Among US cities, FinTech startups in San Francisco “attracted the maximum investments, worth $7.2 billion in the first quarter of 2023.” This is followed “by companies in New York City ($413 million), Minneapolis ($179 million) and Los Angeles ($114 million).”
A number of established FinTech companies “have come forward to assist smaller startups affected by the banking crisis.” For instance, AngelList has “launched new products to help startups affected by the banking crisis to access emergency capital. Such measures are expected to stabilize and ease the situation for startups.”