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Fintech funding slows to lowest level since 2017

The fintech industry has had a rough start to the year when it comes to financing.

According to CB Insights’ first quarter 2024 risk profile report, fintech financing fell 16% sequentially over the past three months. But more troubling than the double-digit decline is the fact that fintech startups raised $7.3 billion globally in three months, the lowest level for the industry since early 2017, the report said.

Notably, CB Insights views Flexport’s $260 million convertible notes as a fintech deal Because the company “offers trade finance and freight insurance.” Some may argue that Flexport isn’t really a fintech company, as many companies offer some kind of finance, payments or insurance as part of their products. Excluding this round, the amount raised is just over $7 billion.

On the bright side, equity transactions were up 15% last quarter,”Meaning investors continue to show interest in fintech solutions, especially payments technology. ” said a CB Insights spokesperson. However, the average deal size was smaller. Not surprisingly, the larger deals in the first quarter went to companies working on a broader range of artificial intelligence solutions.

During the three-month period, fintech startups received 904 investments.Monzo’s $430 million The financing was the largest of the quarter.and Bilt awards $200 million in Series C financing Ranked third. U.S.-based companies were the largest recipients of funding, raising a total of $3.3 billion across 393 deals during the quarter. Europe was not far behind, with startups raising $2.2 billion across 203 deals during the same period.The number of deals in Europe is significantly lower compared to the U.S., indicating greater overall funding in the region

In comparison, in the first quarter of 2023, 1,271 fintech startups received $16 billion in funding. Therefore, the total financing this year fell by 54.3% compared with the same period last year. What’s more noteworthy is that in the first quarter of 2022, 2,026 fintech startups received $32.9 billion in funding. The number of funds raised and deals also declined compared to Q4 2023, when 786 fintech startups raised $8.7 billion.

In the first three months of this year, only six new fintech unicorns were born.

Overall, venture capital investment rose 11% sequentially to $58.4 billion, while the number of deals fell for the eighth consecutive quarter, down 7% to 6,238.

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