Fintech funding globally has experienced a significant downturn, reaching a new four-year low with just $7.3 billion invested in the first quarter of 2024. This stark decline is highlighted in the latest State of Venture report from CB Insights, pointing to a cooling period in the fintech investment frenzy that peaked in Q4 2021 with $38.9 billion raised across 1,680 investment rounds. The recent figure for Q1 2024 showcases a notable reduction in market activity, with only 904 deals completed, making it one of the quietest quarters since the onset of the pandemic.
A Closer Look at Regional Funding Dynamics
In this quarter, the United States emerged as the leading recipient of fintech funding, securing $3.3 billion across 393 deals. This was followed by Europe, which captured $2.2 billion through 203 deals, and Asia, with $1 billion from 210 deals. These numbers reveal a geographical concentration of funding, with the US and Europe continuing to dominate the fintech investment landscape.
Noteworthy deals from the period include a $430 million funding round for UK-based Monzo, led by Alphabet in March, alongside substantial rounds for US-based companies Bilt Rewards and Kore.ai, which raised $200 million and $150 million, respectively, in January. These deals underline the ongoing interest in fintech innovation but also hint at a more selective and cautious approach from investors.
Global Participation and Active Investors
The funding landscape wasn’t limited to the major fintech hubs. Latin America, Africa, Oceania, Canada, and other smaller regions collectively garnered 12% of the total fintech funding for the year, raising just under $700 million. This distribution underscores the global appeal of fintech innovation but also points to significant disparities in funding availability across different regions.
On the investment side, the year’s most active entities included Polychain Capital in the US, Cogitent Ventures in the UK, and Big Brain Holdings, a crypto venture fund based in the British Virgin Islands.
OKX Ventures, the investment arm of web3 technology company and crypto exchange OKX, stood out with 21 deals, signaling a keen interest in blockchain and digital asset firms. Among these was the participation in the $100 million Series A funding round of digital asset firm HashKey in January.
While the total investment has decreased, the strategic focus of investors appears to be narrowing towards ventures that promise substantial innovation and market potential. The current trend may reflect a broader market recalibration, with stakeholders assessing the long-term viability and impact of fintech solutions amid evolving regulatory and economic landscapes.
