For companies interested in the future of fintech, these startups — working on everything from deploying novel AI solutions across the landscape to expanding access to financial services — should be on your radar for partnership and investment opportunities.

The list primarily includes early- and mid-stage startups driving innovation across fintech. Our research team picked winning companies based on CB Insights datasets, including deal activity, industry partnerships, team strength, investor strength, employee headcount, and proprietary Commercial Maturity and Mosaic scores. We also dug into Analyst Briefings submitted directly to us by startups.

Please click to enlarge.

Here is a summary of the 2024 Fintech 100 cohort highlights:

• The 100 winners include 13 wealth management companies, 11 in embedded finance, and 10 in insurance.
• $7.2B in equity funding raised over time, including more than $2B in 2024 so far (as of 10/23/2024).
• Nearly 50% are early-stage companies (primarily seed/angel or Series A).
• 52 companies from outside the United States, across 23 countries on 6 continents. This includes 17 companies from 11 emerging and developing economies.
• 850+ business relationships since 2022, including with industry leaders like Mastercard, State Street, and Flipkart.

Companies are categorized by their primary focus area and client base. Categories in the market map are not mutually exclusive.

CB Insights customers can interact with the entire Fintech 100 list here and view a detailed category breakdown using the Expert Collection.

2024 FINTECH 100 COHORT HIGHLIGHTS

Funding and valuations

The 2024 Fintech 100 winners have raised $7.2B across 370+ disclosed equity deals to date (as of 10/23/2024).

Gaming payments company Coda Payments and rent rewards company Bilt Rewards lead all winners in disclosed equity funding (with $715M and $560M in funding, respectively). 

In 2024 so far, this year’s winners have raised just over $2B across 72 disclosed equity deals.

Three winners have raised mega-rounds ($100M+ deals) in 2024 so far: 

• Bilt Rewards — $200M Series C, $150M Series C – II
• Akur8 — $120M Series C
• FundGuard — $100M Series C

Just 5 companies on this year’s list have reached unicorn status (a $1B+ valuation). Amid the broader venture slowdown, just one winner has hit unicorn status in 2024 so far: Pennylane, a France-based financial management and accounting platform for businesses.

Customers: explore all Fintech 100 deals

Stage breakdown and commercial maturity

Nearly half — 48 — of this year’s Fintech 100 winners are early-stage companies (primarily seed/angel or Series A).

More than 60% of the companies on the list (62) have a CB Insights Commercial Maturity score — which measures a private company’s current ability to compete for customers or serve as a partner — of 4, or Scaling. This indicates they are gaining market traction and growing clients, partners, headcount, and revenue. 

Twenty-six winners have a score of 3, or Deploying, which means they have validated ideas and are beginning commercial distribution.

Top investors

Plug and Play Ventures leads all venture capital (VC) firms, including CVC firms, in the number of winners backed. The 2024 Fintech 100 companies in its portfolio operate across financial management and accounting (Finally), capital markets (FundGuard), payment acceptance (AiFi, Fintoc), banking (Tuum), wealth management (Boldin), and payroll (WorkPay). 

Meanwhile, General Catalyst leads in the total number of investments in the 2024 Fintech 100, as it has invested 13 times across 6 companies. It has invested in Bilt Rewards, financial management & accounting firm Collective, alternative credit scoring company Nova Credit, cross-border payments platform Finom, student loan management platform Summer, and AI agent Powder.

Geographic distribution

Just over half (52) of this year’s Fintech 100 winners are based outside of the United States. The United Kingdom leads all non-US countries with 12 winners, and Canada and Singapore are tied for second with 6 companies each. 

Seventeen companies on this year’s list come from 11 emerging and developing economies (Brazil, Chile, Colombia, Egypt, India, Kenya, Pakistan, United Arab Emirates, South Africa, Thailand, and Uruguay). Many of these winners are focused on solutions driving financial inclusion and accessibility for groups like small businesses and consumers building their credit.

Headcount growth

This year’s Fintech 100 winners collectively employ more than 18,000 people. Median year-over-year headcount growth is more than 30%.

Bilt leads all winners with $3.1M in equity funding per employee. Embedded finance company Brim Financial, blockchain company Fnality, and Coda Payments are tied for second with $1.6M per employee.

Company health

Eighty-three of this year’s winning companies have a CB Insights Mosaic score — a proprietary measure of private company health and growth potential — of at least 700 out of 1,000 (as of 10/23/24). Compared to all private companies — fintechs or otherwise — with Mosaic scores, these 83 winners rank in the top 4% by Mosaic score. 

Bilt Rewards leads the cohort with a score of 952. Nova Credit and Arta are tied for second with 883.

Winners deploy AI across a variety of use cases

AI’s dominance in the venture market and broader tech conversations is reflected in this year’s Fintech 100 cohort. 

Several winners have developed AI solutions to automate financial services operations. For example, Alkymi and Saphyre are among the handful of companies using AI to analyze and extract data from financial documents.

But winners are also deploying AI within specific financial services sectors, including embedded finance, compliance, and insurance.

For instance, Gynger uses AI and data analytics to quickly approve and underwrite financing. The company is backed by PayPal Ventures and Google’s AI-focused venture arm Gradient Ventures. 

Meanwhile, Norm Ai offers AI agents for compliance teams, enabling them to assess content or actions against regulatory requirements. The company raised a $27M Series A round in June 2024 from investors including Bain Capital Ventures and Citi Ventures.

Delos Insurance Solutions, on the other hand, issues property insurance and analyzes satellite data using AI to identify areas with greater wildfire risk. Its founders’ backgrounds in the space industry inform their approach to data gathering via satellite.

Fintechs gear solutions toward financial inclusion and accessibility

Many of this year’s winners are focused on making financial services and technology more accessible to growing customer segments. 

Small businesses are a focus worldwide. This year’s list includes solutions like Sequoia Capital– and Founders Fund-backed Found, which offers banking for self-employed people and small business owners. Meanwhile, Pakistan-based NayaPay offers financial management for consumers as well as small businesses. Singapore-based YouTrip also has both B2C and B2B platforms for cross-border payments, focusing its B2B services on small businesses in southeast Asia. 

Companies in this year’s cohort are also targeting consumers building their financial profiles and wealth. US-based MAJORITY allows individuals to get banked in the US without social security numbers. OTO, meanwhile, offers loans for electric bike and scooter purchases in India. Banks are hesitant to finance the purchases despite strong government support for the vehicles, so the massive consumer market is turning to fintechs.

Meanwhile, companies like Bilt Rewards and CheQ are helping consumers manage their credit and build toward major purchases in different ways. Bilt converts rent payments into points that can be redeemed toward a down payment on a home, and it can also send renters’ on-time payment reports to credit bureaus. 

In India, where credit cards have lower penetration but are growing quickly, CheQ helps consumers pay off all of their credit cards and earn rewards on one digital platform. It aims to support users who are new to the credit system and offers free credit reports and tips on managing credit. The company recently announced a partnership with India’s e-commerce giant Flipkart to enable consumers to earn extra points on purchases during Flipkart’s sale event.

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However, average deal size has remained roughly stable in 2024 YTD, suggesting dealmakers are putting more money behind a select group of fintech companies.

Download the full report to access comprehensive data and charts on the evolving state of fintech across sectors, geographies, and more.

Below, we cover key takeaways from the report.

• Global fintech funding sinks to $7.3B, a 25% QoQ decline. However, Q2’24 funding was propped up in part by mega-rounds for Stripe and AlphaSense totaling $1.3B. Excluding those rounds, the decline from Q2’24 to Q3’24 would have been 13%.

• Deal volume drops 16%. Total deals for fintechs continued to decline, falling 16% from 892 in Q2’24 to 753 in Q3’24. This marks the lowest quarterly level since 2017. For comparison, fintech deal volume clocked in at nearly 1,500 two years ago, in Q3’22 — roughly double where it stands now.

• Average deal size remains stable at $12.7M. Despite deal volume declining, average deal size has remained roughly flat YTD, at $12.7M, compared to $13.2M for full-year 2023. The decline in deal volume and stable deal size indicates dealmakers narrowed their focus to fewer, higher-dollar bets.

• 52% of the top early-stage deals are in less-crowded fintech markets. Just over half of the top early-stage deals occurred in financial services markets outside the US and UK — in countries like France, India, Italy, and Kenya. Less-crowded markets like these offer more room for early-stage fintechs to find niches and grow their client bases. 

• Wealth tech funding increases by 67%, thanks to 2 $100M+ mega-rounds. Wealth tech funding increased the most of any fintech sector QoQ, from $0.6B in Q2’24 to $1.0B in Q3’24. The increase was fueled by 2 substantial deals: 
  • $242M Series F round for turnkey retirement plan provider Human Interest. 
  • $200M Series B round for Earned Wealth, a digital wealth manager targeting medical professionals.
    

ADDITIONAL FINANCIAL SERVICES RESEARCH FROM CB INSIGHTS:

• State of Venture Q3’24 Report
• The embedded finance market ranking: Where integrated financial services are maturing, emerging, and plateauing
• The financial planning market map
• State of Fintech Q2’24 Report

The post State of Fintech Q3’24 Report appeared first on CB Insights Research.

Essential resources to understand the future of financial services:

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B2B payments tools reach cross-functionally across companies, making it not only more essential, but also more complex, to efficiently integrate these tools into workflows.

To help strategy teams prioritize B2B payments tech markets in their planning decisions, we plotted markets across 2 dimensions:

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The post Prioritizing B2B payments tech: How 9 tech-driven markets stack up across maturity and momentum appeared first on CB Insights Research.

What you need to know:

• Payments funding bounced back in Q2’24 but deal volume continued to slide. Overall, payments funding is on pace to finish the year well behind 2023.
• M&A payments deals increased in Q2’24, with B2B payments platforms standing out as common acquisition targets.

It’s been a rocky few quarters for dealmaking in payments.

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In the US, checks and cash have already declined from representing half of all B2B payments in 2019 to a projection of less than a third (32%) in 2024, according to eMarketer. In emerging markets, paper’s share of B2B transactions is likely higher, but coming down thanks to the rise of digital commerce and digital operating systems for merchants.

Companies offering B2B payments solutions are digitizing and automating formerly manual processes like creating invoices, processing payments, and analyzing payments data. Many are building platforms that consolidate the steps in the B2B payments value chain in one place, enabling faster and more transparent payments and financing between businesses. 

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Crypto prices are on the rise. Reported fraud in the market is declining. Some notable players in digital currencies are even going public.

Investors’ and finance leaders’ interest in crypto has also started to return. Executives across industries are talking about crypto again — mentions of terms related to digital currencies are back at levels prior to the crypto winter that began in 2022.

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After nearly a decade of big tech companies venturing into launching their own financial products, the major players have now pulled back. Most have shifted to roles as tech providers, broadly supporting advances in financial infrastructure.

Amazon and Google stand out in this area:

• Amazon is embedding itself in more financial transactions via partnerships, investments, and acquisitions. It’s using these relationships to reach customers across more geographies and a wider range of services. 
• Google has shifted away from providing financial services and instead is connecting its existing platforms to others’ financial offerings. The company is also investing and partnering to enable digital-first financial tools.

We mined CB Insights data on Amazon’s and Google’s investments, acquisitions, and partnerships, as well as patents and earnings transcripts, from January 2021 to July 2024 to explore how the companies are reengineering their fintech strategies.

Download the full report to see where they are making moves.

This report uses CB Insights datasets like investments, acquisitions, business relationships, earnings call insights, patents, and more. Learn more about our data here.

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However, two huge deals — for market intelligence firm AlphaSense and payments juggernaut Stripe — obscured the reality that it was another tepid quarter for the sector as a whole.

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

• Funding increases by 19% quarter-over-quarter (QoQ), buoyed by 2 blockbuster deals. Quarterly funding rose in Q2’24 to $8.9B. But if it weren’t for 2 late-stage deals for Stripe ($694M) and AlphaSense ($650M), funding would have remained flat QoQ. A 16% decline in deal volume also indicates fintech investors remain cautious.​
• Average deal size decreases to $12.8M, down 4% vs. 2023. The slight decline in average deal size YTD highlights broad stagnation in fintech deal sizes. Yet, when looking at the median, deal size has ticked up from $3.1M in 2023 to $4M this year. The 29% increase could signal strength in the long tail of smaller fintech deals.
• Mid- and late-stage deal share is at 20% YTD, up from 18% in 2023. In a more favorable operating environment, investors are showing greater confidence in later-stage companies than they did in the past 2 years — especially in areas like payments and lending. In payments, mid- and late-stage rounds make up 27% of deals YTD, vs. 21% in 2023. In digital lending, mid- and late-stage deals make up 35% of deals YTD, compared to 20% in 2023. 
• 30% of the biggest early-stage deals are for digital asset companies. Crypto and blockchain-focused fintechs are receiving renewed focus, as the crypto winter thaws. Digital asset companies accounted for nearly one-third of the top 10 seed/angel and top 10 Series A rounds. The two largest early-stage deals in the crypto space went to digital asset infrastructure platforms TradeDog ($75M seed) and Biton ($44M Series A).
• US-based funding increases by 45% QoQ to $4.8B. In addition to the funding increase, the US led the world across a few metrics in Q2’24, including share of equity deals (40%) and exits (36%). Mega-rounds led the way: Nine of the 10 biggest deals in the US were worth $100M or more, the most since Q2’22. LatAm was the only other major global region with a funding increase, up by 22% to $442M.

The post State of Fintech Q2’24 Report appeared first on CB Insights Research.

To meet this demand, businesses across industries are embedding financial tools — from buy now, pay later (BNPL) to insurance distribution — into their platforms. Integrating these financial services can help not only improve customer engagement, but also drive new revenue streams and loyalty in the process. 

To help strategy teams prioritize embedded finance markets in their planning decisions, we plotted markets using CB Insights’ TECH framework, which scores markets across 2 dimensions:

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Cross-border payment flows were set to hit $190T in 2023 and will approach $290T by 2030, according to FXC Intelligence. And investors are betting on early-stage companies to help them secure a slice of that projected surge in demand. 

However, cross-border payments tech is not alone in the limelight.

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But when it comes to leaders’ investments and partnerships, cross-border payments expansion and digital wallet integration continue to dominate. 

A newer focus has also emerged: crypto. Though not discussed in their earnings calls, payments leaders are reengaging with digital currencies after pulling back in recent years.

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Broadly, these solutions integrate financial tools into non-financial services. Building them into digital experiences ensures consumers and partners remain there for every part of the customer journey.  

The benefits are drawing businesses across industries to integrate financial tools into their platforms. For instance, banking-as-a-service (BaaS) platforms, which help companies offer features including account opening and deposits, will draw $36B in global revenue in 2024 from account and card fees. That figure is set to grow 2.5x by 2028 to reach $94B, per Juniper Research.

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Salesforce CEO Marc Benioff called AI “the single most important moment in the history of the technology industry” in the company’s most recent earnings call. JPMorgan CEO Jamie Dimon said, in his April 2024 letter, “we are completely convinced the consequences [of AI] will be extraordinary.” 

Others are hyper-focused on AI’s potential to drive new efficiencies and product development. Big pharma companies are pushing ahead with AI-powered drug discovery collaborations, with the goal of accelerating drug development timelines. Payments giants, meanwhile, are leveraging AI to fight back against a wave of fraud.  

Much of the hype around recent advances has yet to translate to revenue. No AI-discovered drug has been approved yet for sale (though Insilico Medicine brought the first drug fully generated by AI into human trials in 2023), and Salesforce acknowledged its latest AI push would not have a material impact on its revenue this year. 

But the promise of future opportunities — and the perceived risk of inaction — is driving leaders to make moves now that could eventually reshape some of the world’s biggest industries. Our 70-slide report surveys the AI strategies of the following companies:

• Financial services & insurance: JPMorgan, Visa, Mastercard, UnitedHealth Group
• Enterprise tech: Oracle, Salesforce
• Pharma: Eli Lilly, Novo Nordisk, Johnson & Johnson
• Industrials: Toyota, Siemens

Using the CB Insights technology intelligence platform, we analyzed signals like investment & partnership activity, executive chatter in earnings transcripts, patents, and more to understand their efforts. Download the full report to see them all. 

Largest companies based on market cap (as of 4/15/2024). Our analysis excludes big tech, semiconductor developers, and state-owned companies.

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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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But how consumers and businesses pay is being reshaped by tech like digital wallets, open banking, real-time payments, and more — posing a threat to legacy payments companies’ revenues as well as profits long-term. Incumbents are striking lots of deals to preempt this. 

Capital One’s planned $35B acquisition of Discover Financial, which is built largely on the value of Discover’s payments network, underscores the value financial services incumbents see in payments.

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Based on our deep dive below, here is the TLDR on the state of fintech:

• Global fintech funding nosedived to $39.2B in 2023 (down 50% YoY), while deal volume slipped 38% to 3,801 — the lowest levels since 2017. On a quarterly basis, Q4’23 saw the fewest fintech deals in 7 years.
• The US increased its dominance of fintech, drawing 41% of deals in 2023 — its highest share since 2016. Meanwhile, Asia’s deal share fell to a recent low of 20%. The uptick in US deal share came as investors shifted toward early-stage companies: early-stage deal share in the US climbed to its highest level in more than a decade.
• At 612 deals, annual M&A exit volume remains higher than it was any year prior to 2021. Quarterly M&A deals saw a modest gain in Q4’23, rising to 149. Europe saw 34% of these deals — more than any other global region — but the top 3 M&A exits in Q4’23 all went to US fintechs.
• Eight fintech unicorns were born in Q4’23 — a 6-quarter high, but far below 2021’s quarterly average. Asia contributed half of the new unicorns — 3 of which are based in Gulf States. This was the first time since 2019 that more fintech unicorns were born in Asia than in the US in a given quarter.
• Investment to banking startups has evaporated, with funding falling 72% in 2023 — the biggest YoY decrease across fintech sectors. Payments startups saw funding decline just 30% YoY — the least of any fintech sector — though the annual funding total was propped up by 2 massive rounds to Stripe ($6.5B) and Metropolis ($1B). Payments remains the most well-funded fintech sector by a wide margin.

Below, we’ll explore these themes across 7 charts.

Globally, funding to fintech startups fell 50% YoY, slipping below $40B for the first time since 2017. Fintech fared worse than the broader venture market, which saw funding decline 42% YoY in 2023.

The average and median deal sizes in fintech continued to decrease from 2021’s highs, falling to $13.8M and $3.2M, respectively, in 2023.

Among global regions, LatAm and Europe saw the largest drops in fintech funding in 2023:

• LatAm funding slid 68% to $1.2B
• Europe funding fell 64% to $6.5B

Q4’23 was a particularly harsh quarter for fintech in terms of deal activity.

The quarter saw fintech startups secure just 740 deals — the fewest in a quarter since Q4’16, and the third straight quarter of declines. 

Among the top deals of the quarter, payments solutions for online and in-person shopping were prominent. These included SumUp ($307M Series F), as well as buy now, pay later players Tamara ($340M Series C) and Tabby ($200M Series D). Notably, payments leaders Checkout.com and PayPal invested in the deals to Tamara and Tabby, respectively.

Despite global declines in deal volume, the US picked up a greater share of deals in 2023 at 41%. The 4-percentage-point increase came at the expense of Asia, which lost 3 percentage points in share YoY. The US’ share was the highest for the country since 2016.

Fintech dealmaking in the US has shifted toward the early stages (seed/angel and Series A), which now claim 70% of all US deals — the highest annual share in more than a decade.

While down from a peak in Q1’22, M&A activity remains relatively steady for fintech startups. Financial services incumbents, larger fintech firms, and PE buyers continue to seek out undervalued assets. In Q4’23, global M&A volume ticked up to 149 deals.

While Europe led in M&A deal share in Q4’23 at 34%, the top 3 M&A deals that quarter all went to US-based firms:

• In capital markets, TMX Group acquired VettaFi for $1.1B
• In insurance, Travelers purchased Corvus Insurance for $435M
• In business payments, WEX acquired Payzer for $261M

Eight fintech companies reached unicorn status (valued at $1B+) in Q4’23. Among global regions, Asia led with 4 of these new unicorns, followed by the US with 2. LatAm and Oceania each accounted for 1.

This was the first time since 2019 that Asia outpaced the US in the number of new fintech unicorns in a single quarter.

Within Asia, the Gulf States saw especially strong representation. Two unicorns (Tabby and Tamara) came out of Saudi Arabia, while the United Arab Emirates contributed one (Andalusia Labs).

Within fintech, banking startups’ access to capital has been restricted substantially. In 2023, they raised $2.2B in equity funding, down 72% from $7.8B the year prior.

Wealth tech funding wasn’t far behind, with a decline of 61% YoY in 2023. 

Funding to payments startups, on the other hand, remains relatively strong, down just 30% in 2023. The top equity deal in Q4’23 went to parking management and payment platform Metropolis, which raised over $1B.

While fintech funding fell across every global region in 2023, Africa was the least affected by the downturn. Africa-based startups drew $0.8B in funding in 2023, down just 27% from 2022.

Meanwhile, the continent’s early-stage deal share declined to a recent low of 83% in 2023. While the vast majority of deals are still early-stage, this trend suggests a growing contingent of companies are maturing into later stages of funding.

Across the whole year, the top 2 deals in Africa went to North Africa-based startups: Egypt-based MNT Halan ($260M Series D) and Morocco-based Cash Plus ($60M round). The third-largest round went to Kenya’s M-Kopa ($55M round).

The post State of Fintech 2023 Report appeared first on CB Insights Research.

To maintain a competitive edge, banking incumbents are turning to technologies that can help digitize their existing processes and offerings in ways that drive efficiencies, cut costs, and add new revenue streams.

In the back- and middle-office, this includes replacing or improving legacy systems with SaaS offerings, as well as leveraging APIs and AI/machine learning (ML) solutions to automate repetitive tasks like know your customer (KYC) approvals and mortgage application reviews.

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The e-commerce giant has long had far-reaching financial ambitions, including introducing its own financial tools (e.g., credit cards, checking accounts, and lending) — not to mention its cashierless checkout tech for physical stores.

However, it has narrowed its focus in the past couple years, driven by a heightened need to find profitable and defensible pathways to growth.

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Stripe graduated from Y Combinator in 2010.

It’s been nearly 14 years and investors have plowed $9.4B into the company.

Stripe is now one of the most valuable payments companies.

But its recent valuation trend has been downward as can be seen below.

Shopify is a strategic partner of Stripe and also invested in 2021 (likely at or near the peak $95B valuation).

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Airbase is part of the crowded expense management space with well-capitalized competitors like Brex, Ramp, Navan.

We predict it will be an attractive target for AmEx in 2024.

Keep reading for the market data and our rationale for the deal.

Market data

Airbase doesn’t make it onto the CB Insights expense management software ESP vendor matrix below, highlighting its commercial traction being light relative to peers.

The company has also raised a fraction of the funding of its peers.

And Airbase is valued at significantly less than competitors.

RATIONALE

So why would AmEx acquire Airbase?

• Enhance AmEx’s B2B card and expense management offerings with a modern spend management platform.
• Broaden AmEx’s appeal to SMBs seeking streamlined financial tools.
• Become a platform for next-gen corporate finance products, combining credit, payments, and accounting.
• AmEx Ventures is already an investor in Airbase.

Find our next M&A prediction in this series — Rippling acquires Pulley — here. 

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A few key issues make them move much more slowly (and at a higher cost) than domestic payments: payment rails differ from country to country, complying with varying regulations is challenging, and not all banks have global relationships, introducing more intermediaries that slow down the process. (Not to mention that even time zone differences can delay a bank accepting a payment.)

Yet, consumers and businesses are transferring more money globally than ever. Cross-border payment flows, which are set to hit $190T in 2023, will near $290T by 2030, according to FXC Intelligence. 

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Fintech deal activity also continued to trend down in Q3’23. Deal count slid back to 2017 levels, falling by 18% QoQ to hit 754.

Using CB Insights data, we highlight key takeaways from our State of Fintech Q3’23 Report, including:

1. Global fintech funding falls 3% QoQ to hit $7.4B.
2. US fintech funding experiences a 5% drop in Q3’23.
3. Unicorn births remain at 3 in Q3’23.
4. Fintech mega-round funding climbs 50% QoQ.
5. Digital lending funding jumps 70% while deals fall 56% QoQ.

Let’s dive in.

Global fintech dollars dipped 3% QoQ to hit $7.4B in Q3’23, leveling off after seeing sharp declines in most quarters since the end of 2021. Meanwhile, deal count fell by 18% QoQ.

This fintech funding stabilization was supported by $100M+ mega-rounds, which accounted for 33% of total fintech funding ($2.4B) in Q3’23.

The top 3 deals of the quarter went to:

• Hong Kong-based microfinance platform Micro Connect ($458M Series C)
• US-based spend management company Ramp ($300M Series D)
• India-based digital lending solution Perfios ($229M Series D)

While US-based fintechs saw a 5% drop in funding QoQ, they continued to drive a significant chunk of global fintech funding. The US accounted for almost half (47%) of all quarterly fintech funding in Q3’23 — the highest share among global regions.

Asia, on the other hand, secured a smaller share of the funding total but saw funding rise substantially. Companies in the region experienced an 82% increase in funding QoQ.

This jump was supported by deal-making activity among digital lending companies — 6 of Asia’s top 10 deals in Q3’23 went to companies in this category.

Unicorn births also showed signs of stabilizing in Q3’23. Like the previous quarter, 3 unicorns (private companies valued at $1B+) were born in Q3’23, bringing the total unicorn count to 312.

Viewing unicorn births through an annual lens shows just how pronounced the unicorn slowdown is in the fintech arena. Just 8 unicorns have been born in 2023 so far, down from 163 in 2021 and 73 in 2022.

The US accounted for 2 new unicorns in Q3’23: crypto custody platform BitGo ($1.8B valuation) and insurtech Kin ($1B). The only other unicorn born in Q3’23 was Hong Kong-based microfinance platform Micro Connect ($1.7B).

Fintech mega-round funding rose 50% QoQ to hit $2.4B across 14 deals in Q3’23. Despite the upward trajectory, this marked fintech’s second lowest quarter for mega-round funding since 2016.

Asia surpassed the US in mega-round funding, securing $1.1B across 5 deals. The US raised $1B across 7 mega-rounds.

Despite a drop in deals, digital lending secured the most funding among fintech sectors in Q3’23 — funding to the space rose by 70% QoQ to hit $1.7B.

Digital lending’s funding boost was driven in part by mega-rounds, which brought in more than half of the sector’s quarterly funding.

Payments and insurtech tied for second in total fintech funding, raising $1.1B each. While this marked a 22% increase for insurtech QoQ, it represented a 39% drop for payments.

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