FT Partners: Q1 Fintech Insights and Research

FT Partners | April 21, 2023

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Executive Summary:

FT Partners' data, analytics, and insights on FinTech stem from our deep domain knowledge and the Firm's proprietary database, which has been meticulously and methodically compiled. The FT Partners Research Team assembles and curates this information through primary research and it represents years of focus and diligence. We believe this report provides the most complete set of global FinTech transactions, trends, and insights, and we are proud to release this information to our clients, partners, friends, and the FinTech sector globally.

• While still feeling the prolonged impact from high inflation and rising interest rates, turbulence in the banking industry added another wrinkle to the FinTech deal activity environment in Q1 2023.
• Despite the turmoil and ongoing challenges in the market, Q1 2023 private FinTech company financing volume rose 53% sequentially to $17.7 billion, up from $11.6 billion in Q4 2022, and broke a string of three consecutive quarters of declines.
  • Stripe's $6.5 billion Series I round – the second largest FinTech funding round ever – accounted for more than one third of the total financing volume in the quarter.
  • Very few US-based consumer FinTech brands raised money in Q1, with the majority of capital going to B2B and FinTech infrastructure or back-office-focused businesses across a variety of FinTech sectors
  • Outside of North America, some large direct-to-consumer companies announced significant capital raises.

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• The actual number of financing rounds also picked up sequentially in Q1 2023 (794 deals) compared to Q4 2022 (681 deals), but still remained below the heightened activity levels reached in 2021 and early 2022.
  • The uptick in deals was primarily led by a steadier stream of early-stage and smaller-sized deals with 46% of all financing rounds in the quarter raising less than $5 million.
• With very few large deals, M&A volume in Q1 only reached $9.2 billion, the lowest level since Q2 2020 ($9.1 billion), when the world was reeling from COVID-19 shutdowns.

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