Retail Fintech VC deal value rose 5.0% QoQ to $2.6 billion in Q4 2023, according to recent updates from Pitchbook.
However, deal value remained down by 18.2% YoY, the Pitchbook report noted.
While this represents the third quarter in a row where VC deal value increased QoQ, quarterly deal value “continues to sit at its lowest level since Q1 2017.”
For the full year, retail fintech companies “secured $10.0 billion in venture capital, down 57.5% from the $23.6 billion seen in 2022,” the report from Pitchbook revealed.
During Q4, retail fintech companies “recorded 148 VC deals.”
Compared with the 166 deals seen in Q3, this denotes “a 36.0% QoQ decrease.”
On a YoY basis, deal count this quarter “was down by 32.1% compared with the 218 deals seen in the prior year period.”
Pitchbook’s report also stated that 699 deals were “logged for 2023, representing a 36.0% drop from 1,093 deals in 2022.”
As stated in the update, the top deals in Q4 were “primarily seen in credit & banking companies.”
The report from Pitchbook pointed out that these “include Tamara’s $340.0 million Series C, KOHO’s $277.8 million Series D, and Tabby’s $250.0 million equity and $700.0 million debt Series D.”
As mentioned in the report from Pitchbook, other notable deals came “from wealthtech and consumer payments; Scalable Capital raised a $227.8 million Series E; Stash closed a $40.0 million late-stage round; PaySend raised $65.0 million in a late-stage round; and YouTrip secured $50.0 million for its Series B.”
As covered last month, an extensive report has been shared, entitled Financial Fusion: Fintech’s M&A Landscape Unveiled: A guide to fintech M&A and the next wave of deals, by the researchers at Pitchbook.
PitchBook says that the Fintech sector continues to attract substantial investments but certain segments might have become oversaturated.
According to Pitchbook, here are the key takeaways:
- Heavy investment has led to both winners and overcrowding: Today’s fintech M&A landscape is informed by six years of heavy fintech investment through 2022. Fintech startups were an early darling and beneficiary of ZIRP-era capital flows. As a result, many fintech spaces appear crowded to us, including KYC/ AML, fraud detection/prevention, expense management, and underwriting as a service. A number of these companies will have to add new products, merge, get acquired, or close shop.
- Fintech M&A activity declining YoY: 2023 saw $28.3 billion in US/Canadian fintech M&A value, a 45.8% decrease from $52.2 billion in 2022 and a 36.5% decrease from $44.5 billion in 2021. 145 total fintech acquisitions were seen in 2023, representing a 15.7% decline from 2022’s 172 deals and a 48.9% decline from 2021’s 284 deals.