Fintech Deal Activity Across M&A, Private Firm Financings and IPOs Remained Steady YoY – Report

A collective sense of measured “optimism” developed throughout Q1 2024, as the S&P 500 recorded its best-performing first quarter since 2019, the FT Partners team noted in a research report covering Fintech ecosystem developments.

The Fintech focused research report from FT Partners pointed out that the tech sector reported stronger-than-expected earnings, and consumer retail spending “held strong while unemployment remained low.”

Growth in the market was observed “with prudence though as heightened inflation delayed any hoped-for interest rate cuts by the Fed, Big Tech layoffs extended into the beginning of the year, and geopolitical conflicts intensified in the Middle East and Ukraine.”

For the FinTech sector, while Q1 deal activity “initially got off to a slow start in January, it built up momentum throughout the quarter with several large deal announcements, culminating in a 24-month financing deal count high in March.”

Total dollar volume for FinTech deal activity “across M&A, private company financings, and IPOs increased 3x compared to Q1 2023, heavily skewed by Capital One’s pending $35 billion acquisition of Discover, the fourth largest FinTech M&A deal ever.”

When excluding the mega-merger, volume still represented a nearly 2x increase over the year-ago-period, as M&A volume was “further boosted by ten more $1 billion+ M&A deals, up from just two deals of this size announced in last year’s Q1.”

Conversely, private company funding volume fell “to the lowest quarterly level in six years – since Q1 2018 – declining 19% year-over-year, when excluding Stripe’s $6.9 billion Series I in March of 2023.”

Despite the substantial drop in funding volume, bright spots in private company financing activity shone through – the number of capital raises “increased both sequentially and year-over-year, recording 945 new deals and the Crypto & Blockchain sector reached a new record for quarterly deal count, with 300 capital raises in Q1 2024.”

Further, the median size of FinTech company valuations “increased overall, with all-time highs for Seed ($20 million) and Series A ($57 million) rounds, in particular.”

Additionally, nine new unicorns were “minted during the quarter, compared with just three back in Q1 2023, and notable valuation milestones were reached by companies like UK challenger bank Monzo ($5 billion) and rent rewards program innovator Bilt ($3 billion).”

In the public markets, Kazakhstan-based financial super app Kaspi “completed its secondary listing on Nasdaq valuing the Company at $17.5 billion and marking the first US FinTech public offering in nearly a year and a half.”

Ibotta’s IPO on NYSE in April kicked things off for Q2, “raising $577 million in gross proceeds and closing up 17% on its first day trading.”

Marex Group is also set to go public on Nasdaq “before the month is out, with all three IPOs so far this year potentially priming the market for further activity later in the year.”

FT Partners’ data, analytics, and insights on FinTech “stem from our deep domain knowledge and the Firm’s proprietary database, which has been meticulously and methodically compiled.”

The FT Partners Research Team assembles and “curates this information through primary research and it represents years of focus and diligence.”

They believe this report “provides the most complete set of global FinTech transactions, trends, and insights, and we are proud to release this information to our clients, partners, friends, and the FinTech sector globally.”

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