Fintech funding for US firms raised $2.6 billion in Q1 2025, experiencing a 29% drop from $3.8 billion in Q1 2024 and an 83% drop from $14.9 billion in Q4 2024. This is according to a report distributed by Tracxn.
The thesis is that high interest rates and geopolitical worries have pushed investors to focus on more established and profitable firms.
The report claims that globally, there are over 44.1K companies and more than 12.5K funded startups, with the US leading the way. However, funding activity saw a pullback in Q1 2025.
San Francisco led the US Fintech funding ecosystem in Q1 2025 with $888 million, accounting for 34% of total funds raised. It was followed by New York with $392 million and Boston with $171 million.
Later-stage funding during the first quarter amounted to $924 million, a 38% decline from $1.5 billion in Q1 2024 and a 93% drop from $12.8 billion in Q4 2024.
Early-stage rounds received $1.5 billion in funding in Q1 2025, down 21% from $1.9 billion in Q1 2024 and Q4 2024.
Seed-stage funding tanked by 47% to $208 million, a 47% fall from $391 million in Q1 2024 and a 2% drop from $212 million in Q4 2024.
Only two $100 million funding rounds were reported in Q1 2025, compared to 9 in Q1 2024 and 13 in Q4 2024.
