Fintech Funding fell 33% QoQ and 46% YoY to $20.4B in Q2’22

Fintech Funding fell 33% QoQ and 46% YoY to $20.4B in Q2’22

According to a MoneyTransfers data presentation, Fintech funding has fallen to its lowest level in nearly two years. The firm concludes that the sector raised $20.4B in Q2 2022, a 33% decline from the previous quarter. That was also a 46% slump in year-on-year terms. The deals also fell 17% to 1,225, the lowest quarterly total since Q4 2020.

MoneyTransfers CEO Jonathan Merry has had his take on the data. He affirms, “Many startups are facing pressure to achieve profitability amid a challenging economic environment.” He adds, “The main reason for the decline in Fintech funding is the overall slowdown in the economy. With businesses and consumers cutting back on spending, investors are less likely to take risks on new and unproven Fintech companies.”

Mega-round Funding Dropped Sharply

Funding for global mega-rounds dropped sharply in the second quarter of 2022, reaching its lowest point since the fourth quarter of 2020. According to MoneyTransfers analysis, 55 deals raised $9.7 billion in the second quarter, a 45% decrease from the year’s first quarter.

The three largest rounds of funding went to Coda Payments (Singapore), Velocity Global (US), and Circle (US). While the overall trend in mega-round financing is positive, the sharp drop in the second quarter suggests investor confidence may be waning.

The US Fintech Sector Led in Global Funding

The US fintech industry took a hit in Q2 this year, with funding dropping 37% from the previous quarter and 43% from the same period last year. However, despite this setback, the US still accounted for 42% of total global fintech funding and 38% of all fintech deals.

One possible reason for the drop in funding is the increasing regulation of the fintech industry. The SEC has proposed stricter regulation of firms offering digital assets, making investors more cautious about investing in fintech companies. Full story and statistics can be found here: Fintech Funding fell 33% QoQ and 46% YoY to $20.4B in Q2’22

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