The news: Fintech investors are favoring late-stage deals as the sector faces a funding crunch, per TechCrunch.
By the numbers: Globally, fintech funding increased slightly in June compared to prior months, but the bump in funding has occurred in dollar amounts, rather than in deal volume. Preliminary June figures show similar dollar amounts funding fewer deals, per CrunchBase.
Comparatively, fintech funding in 2022 is weak. Year over year, funding has been cut nearly in half, and so has the number of deals.
Late-stage deals: The same amount of money funding a smaller number of deals indicates that venture capitalists are more focused on where they direct their assets. This trend, which we identified earlier in 2022, has continued as the economy stumbles.
Contrasting figures: In contrast to the figures provided by CrunchBase, numbers from CB Insights seem to tell a slightly different story about fintech funding in Q2 2022.
But still, investors are challenging fintechs to tighten up their costs.
The big takeaway: As the Q2 numbers firm up over the coming weeks, a clearer vision will emerge to confirm or refute the focus on late-stage funding. But the overall picture of fintech funding shows that it’s slowing, and that it looks to be falling to its lowest levels since 2020. And regardless of the stage of the company, venture capitalists are conducting much stronger due diligence on potential funding recipients before they invest to ensure those firms are prudently managing their money and keeping costs low.
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