State of Fintech Q1'24 Report - CB Insights Research (2024)

Investors remain cautious in fintech, with funding declining to its lowest quarterly level since 2017 even as deals tick up.

Despite growth in broader venture funding, fintech funding continued to slide in Q1’24, declining 16% quarter-over-quarter (QoQ%) to $7.3B.

Fintech deal volume, on the other hand, increased for the first time since Q1’23.

Based on our deep dive below, here is the TL;DR on the state of fintech:

• Fintech funding falls 16% QoQ to its lowest quarterly level since 2017. Quarterly funding declined to $7.3B in Q1’24, counter to the 11% rebound in the broader venture market. That said, fintech deals increased by 15% QoQ as investors focus on writing smaller checks.
  
  
• Average deal size YTD in fintech is $11.1M, down 18% vs. $13.6M in full-year 2023. A dearth of blockbuster deals is driving the decline: In Q1’24, there were just 12 mega-rounds (deals worth $100M or more) representing 26% of total funding — the lowest share since Q2’23, when it hit 23%. Nevertheless, these rare deals can reach a massive scale: the biggest fintech round in the quarter was UK-based challenger bank Monzo‘s $431M Series I deal — worth 6% of the global funding total.
• Mid- and late-stage deals make up 20% of deals YTD, up from 18% in full-year 2023, as investors look to startups with more established track records. So far this year, investors are favoring later-stage companies to a greater degree than the past 2 years. The shift is most pronounced within specific sectors. In payments, for instance, mid- and late-stage deals make up 29% of deals YTD, vs. 21% in 2023. In digital lending, mid- and late-stage deals make up 40% of deals YTD, nearly double the 2023 total.
• Banking startups have a billion-dollar quarter. Banking funding doubled in Q1’24 to reach $1B across 38 deals. Five of the top 10 banking deals in the quarter were late-stage, and 2 were mega-rounds of $100M+. Besides the Series I deal for Monzo, Germany-based banking-as-a-service company Solaris raised a $104M Series F round.
• Europe fintech funding increases 22% QoQ to $2.2B. Europe was the only major global region to see fintech funding increase in Q1’24. The continent also led all regions with 37% of exits in the quarter. Meanwhile, funding declined 11% QoQ to $3.3B in the US, which still led all regions in total fundraising.

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