Fintech funding rebounds, with Stripe leading
After three straight quarters of declines, fintech companies saw an increase in venture capital dollars in the first three months of 2023, according to Pitchbook data provided to Axios.
Why it matters: Startups appear to be coming to terms with the fact that lower valuations are the new norm, and that's reigniting dealmaking.
Details: Startups in the fintech space raised $17 billion across 847 deals in the first quarter of the year, up 45% from a quarter earlier.
- Payments heavyweight Stripe led the charge, having raised $6.5 billion at a lower, $50-billion valuation in mid-March.
- Even when excluding Stripe's enormous round of funding from the figures, dollars that entered the ecosystem remained nearly level with the fourth quarter of 2022.
Between the lines: Fundraising picked up in part because startups became more willing to take down rounds and more-structured deal terms.
- Heavy with dry powder, investors are deploying increasingly to business-facing fintechs that tend to have steadier revenue streams than consumer-facing ones.
- Interest in regtech, fraud prevention, and generative AI in particular have been on the rise.
- In 2022, 62% of all fintech funding went to B2B startups, says Pitchbook analyst Rudy Yang. Q1 2023 wasn't yet available.
The big picture: It's unlikely we'll see the anomaly that was 2021's funding figures again for the time being, but Pitchbook's figures suggest the fintech ecosystem remains "relatively healthy," says Yang.