PitchBook has released its latest Retail Fintech Report. The update highlights key developments in the fast-growing financial technology ecosystem.
Deal value and count:
In Q3, PitchBook pointed out in its report that retail fintech VC deal value and deal count both “retreated from Q2 levels.”
PitchBook reportedly recorded $2.4 billion across 103 deals this quarter, which is “down 43.9% and 39.4% QoQ, respectively. On a YoY basis, deal value was up 14.0%, though deal count declined by 39.8%.”
Still, this is higher than 2023’s average quarterly deal value of $1.9 billion.
Retail fintech companies continue to struggle in “a capital-constrained environment where investors value profitability equally or higher than growth.”
Additionally, PitchBook revealed in its report that “overcrowding in certain fintech subsectors has made capital raising even harder.”
This is evident in consumer fintech’s fundraising levels, which still “lag
those of their enterprise fintech counterparts.”
Retail fintech companies made up “41.1% of total fintech VC deal value in Q3, and 41.5% of total fintech VC deal value YTD.”
As noted in the research report from PitchBook, this compares with “23.1% in 2023 and 37.9% in 2022.”
Key deals:
The largest deals that closed in Q3 “were Mynt’s $788.4 million late-stage round at a pre-money valuation of $4.1 billion (2.1x valuation step-up), Gojo & Company’s $229.9 million Series F (approximately $120 million in debt), Stori’s $212 million late-stage round ($105 million in equity and $107 million in debt), Aven’s $142 million Series D at a $858 million pre-money
valuation, Valon Mortgage’s $100 million Series C, Neon’s $93.5 million Series E, and Imprint’s $75 million Series C at a $550 million pre-money valuation (2.3x valuation step-up).”
Deal sizes:
The YTD median VC deal size for retail fintech companies “was $3.5 million in Q3 2024, up 15.0% from 2023’s median of $3.0 million.”
PitchBook also mentioned in its latest research study that at the stage level, YTD median deal sizes are up “for late-stage and venture-growth deals.”
When compared to 2023 levels, the late-stage median deal size increased “15.0% to $7.7 million, while the venture-growth median deal size increased 14.1% to $21.7 million.”
Conversely, the pre-seed/seed median deal size “fell 6.5% to $1.6 million from 2023, and the early stage median deal size fell 16.1% to $2.9 million.”
Pre-money valuations:
PitchBook also stated in their report that they recorded “a YTD median pre-money valuation of $30.5 million in Q3 for retail fintech companies, denoting a 9.6% decline from where the YTD median sat in Q2.”
Compared with 2023’s median of $15 million, this represents “a 102.7% increase.”
But as they have continued to note, PitchBook pointed out that valuations for down rounds have typically “not been disclosed, which may paint valuation trends in an artificially positive light.”
The research report from PitchBook also noted that at present, YTD median pre-money valuations have risen “across all deal stages compared with their 2023 medians, with pre-seed/seed at $10.3 million (up 21.5%), early-stage at $33.3 million (up 121.7%), late-stage at $65.9 million (up 37.8%), and venture growth at $491.0 million (up 10.3%).”
