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Fintech funding fell 40% in 2023

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Jan 8, 2024
Data: FT Partners; Chart: Axios Visuals

Financing to fintech companies fell 40% in 2023 amid a dearth of IPOs and megarounds, with companies raising an estimated $53.7 billion through the year, per FT Partners.

Why it matters: Two years into the slowdown, venture-backed startups see the ends of their cash runways, and that means 2024 will be the year for companies to hit positive cash flows, find new capital or seek other avenues.

Context: Venture-backed companies collected an unprecedented amount of capital during the pandemic era, giving businesses longer-than-usual cash runways.

Details: It's the second consecutive year of declines, as higher interest rates and lackluster portfolio performance forced later-stage funds to pull back on big venture capital bets.

  • On average, each deal raised $18.7 million in 2023, compared with $24.3 million in 2022, per FT Partners data.
  • As investors have become more aggressive about cutting valuation and due diligence, companies have shied away from raising capital. Instead, many have been seeking "paths to profitability."
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