[co-author: Carlos Juarez]*
Fintech Capital Raising Trends in 2024
Global capital raising in the fintech sector rose 19% quarter over quarter, while deal volume declined 16%, signaling that investors remain cautious, according to CB Insights’ State of Fintech quarterly report. U.S. fintech deals raised $4.8 billion in 324 deals. CB Insights’ report discusses financing, exit, and other trends in the fintech sector. Below we highlight notable trends.
Late-stage deals
Despite this overall investor caution, investors showed more confidence in late-stage companies than they had in the prior two years. Late-stage deals accounted for 20% of global deal share in Q2 2024, up from 18% in 2023. Late-stage rounds make up 27% and 35% of the payments and lending subsectors, respectively, of deals year to date (YTD). In the United States, late-stage deals accounted for 7% of overall deals.
Mega rounds and unicorns
Two late-stage fintech “mega-rounds,” Stripe’s $684 million Series I and AlphaSense’s $650 million Series F, accounted for 15% of overall global funding in Q2 2024. U.S. deals represented $2.4 billion of mega-round funding. There have been 27 mega-rounds in 2024, which raised $4.2 billion. There are now 329 fintech unicorns globally, with nine new unicorn “births” in 2024. Of the 329 fintech unicorns, 171 are U.S.-based.
Exits
With the IPO market still on a recovery trajectory, fintech companies have completed 12 IPOs and two SPAC mergers globally in 2024. The U.S. market accounts for only three of these IPOs and no SPAC merger. The top two IPOs of Q2 2024 include Ibotta’s $2.7 billion U.S. IPO and the $973 million Saudi IPO by Rasan. Global M&A activity has increased slightly, with 312 transactions completed in 2024, including 112 M&A transactions in the United States.
Fintech Subsector Funding
Payments companies raised $3.4 billion in 178 deals in 2024, with an average deal size of $15.8 million. As noted above, Stripe raised $684 million in a Series I round. The next largest payments company rounds include Ramp’s $150 million Series D round and Guesty’s $130 million Series F round—both U.S. companies. Globally, there have been two IPOs, one SPAC merger, and 25 M&A transactions completed by payments companies.
Digital lending companies have raised $1.5 billion in 138 deals in 2024, with an average deal size of $11.7 million. The largest Q2 2024 digital lending deals were all undertaken by non-U.S. companies and include India-based Fibe’s $66 million Series E round, UK-based Colendi’s $65 million Series B round, and Canada-based Brim’s $63 million Series C round. Digital lending companies have completed 12 M&A transactions and one SPAC merger in 2024.
Insurtech companies have raised $2.1 billion across 195 deals in 2024, with an average deal size of $13.2 million. U.S.-based Sidecar Health raised $165 million in its Series D, making it the top equity insurtech deal in Q2 2024. Two IPOs and 20 M&A transactions have been completed by insurtech companies.
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