Enterprise fintech VC deal activity continued “to decelerate in Q2,” according to a comprehensive update from Pitchbook.
VC deal value this quarter has reportedly “decreased 11.9% YoY to $10.6 billion.” Excluding the Stripe deal, VC deal value “was $3.7 billion, representing declines of 69.2% YoY and 31.4% QoQ.”
The Pitchbook report further noted that capital continued “to shift toward B2B, with 85.5% of total fintech VC deal value captured by enterprise fintech startups and 14.5% invested in consumer fintech in Q2.” Funds have ample dry powder, but they “are lengthening their deployment times.”
As such, Pitchbook now “expect capital deployment to remain soft in the near term.”
The Pitchbook report further revealed that the top deals during the quarter “were primarily seen from late-stage companies.”
In addition to Stripe’s deal, Q2 also “saw payables automation platform Tipalti’s $150.0 million late-stage round, regulation technology startup Quantexa’s $129.0 million Series E, and advisor technology firm Altruist’s $111.6 million Series D.”
The report added that early-stage e-commerce lender 8fig also “closed a $140.0 million Series B during the quarter.” Notably, many repeat investors “participated in these deals, suggesting limited capital availability may be further reserved for insider rounds at the late stage.”
The report pointed out that the median deal size “for enterprise fintech companies was $5.0 million in Q2, down 4.5% from the 2022 median.”
Still, this was slightly higher than “the Q1 2023 median of $4.6 million. Compared with 2022, median deal value at the early stage declined 6.7% to $6.7 million; median deal value at the late stage fell 25.4% to $8.9 million; and the median venture-growth deal value dropped 11.6% to $32.0 million.”
The report also mentioned that the angel and seed median deal value “increased by 25.0% from its 2022 median to $3.0 million. Compared to Q1 medians, the early-stage and late-stage medians were up by 56.6% and 31.7%, respectively.” Medians for the venture-growth stage grew 52.2%. Conversely, medians at the angel and seed stage “were down by 4.1% versus last quarter’s medians.”
As stated in the Pitchbook report, the Pre-money valuation medians continued to decline across all stages, “with the venture-growth median seeing the greatest decline from 2022 of -45.4%.”
The report further revealed that angel and seed, early-stage, and late stage pre-money valuation medians “were down by 9.4%, 26.0%, and 22.8%, respectively.”
Pitchbook concluded that they “expect enterprise fintech medians to continue to decline in 2023 as private market valuations further level-set.”
