State of Fintech Q2’23 Report

State ofFintech Global | Q2 2023 Global data and analysis on dealmaking, funding,and exits by private market fintech companies Guess Less.Win More. CB Insights helps the world’s leadingcompanies make smarter technologydecisions with data, not opinion. Our Technology Insights Platform providescompanies with comprehensive data, expertinsights, and work management tools thatenable them to discover, understand, andmake technology decisions. ▮▮▮▮IIISign up for a free trial Platform Connect Get introductions to the right technologyproducts, services, and partners withone click. No research. No hassle. Make your brand moresearchable. Findable.Buyable. Partnerable.Investable. Complete a free Analyst Briefing Survey*and get in front of enterprise tech buyers,M&A teams, and investors. *Survey takers have increased their lead generation 3x on average. ▮▮▮▮▮IIIApply here With CB Insights, youfind the right informationin a matter of seconds.Analysts will also sendfurther detailed portfolios, which is really valuableinformation. Selim YukselVP of Innovation, Akbank LAB Dig Deeper. CB Insights clients can find and trackcompanies using our analyst-curatedExpert Collections. Wealth TechInsurtechCapital Markets Tech PaymentsBankingDigital Lending Retail Bank AI Readiness Index:Who’s best-positioned for theAI boom? 3 applications of generativeAIin financial services Our Most PopularResearch onFintech ESG Market Map: 115companies powering ESG-focused investing and banking Analyzing Visa’s growthstrategy 200 companies automatingregulatory and complianceefforts for financial institutions How BlackRock, Citigroup, andJP Morgan use AI to delivermore accurate ESG datasets toinvestors at scale Analyzing Apple’s fintechstrategy Banking-as-a-service (BaaS) isseeing a burst of M&A andventure activity These 75 embedded insurancecompanies are transformingdigital distribution AnalyzingThoma Bravo’sinvestment strategy TLDRState of Fintech Your rundown onfintech in Q2’23 $2B $7.8B -75% 150% 5 Decline QoQ inpayments funding. IPO exits in Q2’23.All from fintechsoutside the US. Fintech fundingin Q2’23. Lowestsince 2017. Funding growthQoQ for LatAm &the Caribbean. Mega-roundfunding in Q2’23.A 6-year low. Funding to paymentscompanies fell 75% QoQ inQ2’23 to $2B. That markeda 6-year funding low forthe sector and the biggestQoQ decrease across allfintech sectors. Digitallending funding tooksecond place, decreasing44% to $1B. Paymentsdeal volume fell 14% to hit148 in Q2’23. Fintechs in LatAm & theCaribbean drew $0.5B inQ2’23, up 150% QoQ, whiledeal count (69) remainedroughly the same QoQ.Early-stage deal share ispacing at 81% for 2023, a5-year high. The region’stop deal in Q2’23 went toCayman Islands-basedDeFi platform Kross Wallet,which raised a $100Mseed round. Funding from $100M+mega-rounds fell 78% QoQto total $2B. This steepdrop was due in part toStripe’s $6.5B deal inMarch, which inflatedfunding for Q1’23. Thenumber of mega-rounds inQ2’23 also fell 20% QoQ to12 — the lowest level in 5years. In the face of high-profileUS bank collapses in thespring, both fintechfunding and deals fellto levels not seen since2017. Funding slipped byalmost half (48%) quarter-over-quarter (QoQ) to$7.8B. The quarter’s 845deals marked a 22% dropQoQ. Fintech saw 5 total IPOs inQ2’23 — a slight uptickfrom 4 in Q1’23. All 5 werefrom non-US-basedfintechs, and four out ofthe 5 went to fintechsbased in Asia. Meanwhile,fintech saw a 20% drop inM&A activity to 142 exits.Two of these (Adenza andPismo) were $1B+ exits. See the data→ See the data→ See the data→ See the data→ See the data→ ContentsState of Fintech Global Trends US105Canada111Asia117Europe123LatAm & Caribbean129Africa135 Investment Trends11Unicorns34Exit Trends40Investors45 Collection Spotlights49 Payments50Banking59Digital Lending68Wealth Tech77Insurtech86Capital Markets Tech95 Global Trends Investment Trends State of Fintech| Global Trends | Investment Trends Global fintech funding reaches $22.9B across 1,922 deals in 2023 YTD State of Fintech| Global Trends | Investment Trends Funding falls 48% and deals decrease 22% QoQ to reach lowest levels since2017 State of Fintech| Global Trends | Investment Trends The US leads in quarterly funding and deals, followed by Europe and Asia State of Fintech| Global Trends | Investment Trends US quarterly deal share decreases 5 percentage points QoQ State of Fintech| Global Trends | Investment Trends Quarterly deal share remains relatively stable across all investor types State of Fintech| Global Trends | Investment Trends Global average and median deal sizes tick down in 2023 YTD State of Fintech| Global Trends | Investment Trends Asia is the only region that sees median deal size growth in 2023 YTD State of Fintech| Global Trends | Investment Trends Median deal size flattens for angel investors and falls for all others State of Fintech| Global Trends | Investment Trends Mega-round funding falls 7