PitchBook has provided a comprehensive update focused on the retail Fintech sector.
PitchBook provides insights in its report on Deal value: Retail fintech VC deal value continued to be muted, “declining 15.3% YoY and 30.8% QoQ to $1.9 billion in Q1 2024.”
Aside from the $1.6 billion in retail VC deal value in Q2 2023, Q1’s value represents the lowest quarterly level seen in over five years, the PitchBook report noted.
This highlights the ongoing challenge “that retail fintech companies face in finding funding given the crowded space, macroeconomic stressors, and tighter capital supply.”
Comparatively, the PitchBook report pointed out that enterprise fintech counterparts “secured $3.5 billion in VC funding, representing 64.6% of total fintech VC deal value versus retail fintech’s 35.4% share.”
Deal count: PitchBook recorded 144 deals “for the quarter, denoting an 11.7% QoQ decrease and a 31.4% YoY decline. Similar to deal value, VC deal count for consumer fintech companies now sits at its lowest level in over five years.”
PitchBook further noted that for Key deals: Q1’s top deals were “concentrated in the wealthtech segment, followed by the credit & banking and alternative lending segments. Deals to note include Monzo’s $621.0 million Series I led by CapitalG and GV; KreditBee’s $209.4 million Series D (inclusive of a $9.4 million extension from early Q2) led by Premji Invest; Bilt Rewards’ $200.0 million Series C led by General Catalyst; and ADDI’s $86.0 million late-stage raise ($36.0 million equity, $50.0 million debt).”
As stated in the report from PitchBook, smaller deals at “the pre-seed/seed stage were concentrated in wealthtech, including dub’s $17.0 million seed round ($15.0 million equity, $2.0 million debt) led by Tusk Venture Partners, LODAS Markets’ $7.5 million seed round of debt and equity led by Firebrand Ventures, Hedge’s $4.7 million seed round, and Tandem’s $3.7 million seed round led by Corazon Capital.”
Deal sizes: The median deal size “for retail fintech companies was $3.2 million in Q1 2024, down 5.9% from 2023’s median of $3.4 million. However, the median deal size remains above median levels prior to 2021.”
The PitchBook report added that all stages “saw a decline in their median deal sizes in Q1 compared with their median levels from 2023.”
The pre-seed/seed median deal “fell 16.9% to $1.4 million, the early-stage median dropped 47.9% to $1.8 million, the late-stage median decreased 33.3% to $4.5 million, and the venture-growth median declined 25.2% to $14.0 million.”
Notably, the median late-stage deal size “plunged in Q1 due to several early-stage companies receiving smaller checks from angel investors and accelerators.”
The PitchBook report also mentioned that “average deal size of early-stage companies is $8.8 million, down 16.5% from 2023’s average of $10.5 million.”
Pre-money valuations: PitchBook recorded a “median pre-money valuation of $16.6 million in Q1 for retail fintech companies.”
Compared with 2023’s median, this represents “a 3.7% increase.”
PitchBook also stated that “driving this slight uptick were deals at the late stage (up 14.6% to $43.4 million) and venture-growth stage (up 188.0% to $860.0 million).”
However, the increase in venture-growth pre-money valuations “was largely driven by a small sample size of companies that closed rounds with high valuations in Q1, including Monzo, Octane, Sygnum Bank, and KreditBee.”
Conversely, median pre-money valuations “fell at the pre-seed/seed stage (down 6.2% to $8.9 million) and early stage (down 45.2% to $11.0 million).”
Similar to the venture-growth stage, however, the late stage “saw a smaller sample size of disclosed valuations in Q1, partly accounting for the steep drop in its median pre-money valuation.”
