Fintech venture funding falls 35% short of 2021 levels

VC investors pulled back aggressively on fintech dealmaking this year, investing a fraction of what they did in 2021, Pitchbook data shows.

By the numbers: Investors put $79.5 billion into the industry in 2022 after investing a record-breaking $122.9 billion in 2021.

Check sizes averaged around $15.8 million this year vs. $20 million in 2021, as mega-bets fell sharply.

Of note: Pitchbook's data is year-to-date for 2022 — though with the rest of the year largely being holidays, the numbers are likely to be a fair representation of the entire year.

Context: The fintech world faced a bevy of macroeconomic shocks in 2022 that made the business more difficult.

• Consumers went back to in-person, lowering the need for online payments and forms of entertainment.
• The Fed hiked rates to quash inflation, hitting lending fintechs especially hard.
• As the funding tide receded, some major crypto players, including Three Arrows and FTX, were caught with their swim trunks off — putting the brakes on one of the hottest parts of the fintech industry.

Yes, but: The industry is far from dead. $79.5 billion would still make 2022 the second highest year on record for fintech VC funding.