A record quarter for fintechs, despite falling investments

Business analytics platform CB Insights released its report on the state of the fintech industry in the first quarter of the year. A study that highlights lower funding, but more and more operations.
Less financing but more operations, this is essentially what emerges from the study on the state of fintech carried out by the commercial analysis platform CB Insights. And for good reason, in the first quarter of 2022, the analysis notes an 18% drop in the value of financing compared to the same period in 2021, for a total amount of $28.8 billion. It should also be remembered that financing in the first quarter of 2021 experienced an outperformance of 114%. The contrast with the 2022 trend is thus nothing to worry about. It should be noted that on a global scale, out of five dollars invested, one is dedicated to fintech.

© CB Insights

The report also highlights a 7% increase in operations compared to last year, for an average amount of 25 million dollars, compared to 32 in 2021, a decrease of 22% over the same period (QoQ, editor's note ). The trend shows the fallout from the rise of cloud, low code, no code and software as a service practices, resulting in more and more partnerships.
For its part, the insurtech sector stands out as the most impacted at the start of the year, with a decrease in financing of around 58%. A poor performance which contrasts with the last quarter of 2021 which had given the sector a record investment of 5.3 billion dollars, against 2.2 for 2022.

© CB Insights

Record mergers/acquisitions

257 is the number of fintech acquisitions recorded in the first quarter of 2022, note that 5 of them were for a value of at least one billion dollars. First place goes to the Coinbase exchange platform, and its takeover of the Brazilian holding company 2TM, which notably owns the Mercado Bitcoin exchange, leader in the Latin American crypto-asset market, for an amount of 2.2 billion dollars.

More and more unicorns

The CB Insights study also sheds light on the births of 34 unicorns, with a total number of 257 companies valued at over $1 billion. The ranking of new arrivals is dominated by the French Qonto whose latest estimate brings it to 5 billion dollars, far ahead of the 3 billion of the American Cross River Bank and the 2.2 billion of the British Accelerant.

© CB Insights

And in Europe?

The first quarter of 2022 gives satisfaction to European fintechs, which have already recorded 30% of all financing last year, for an amount of around eight billion dollars. The data in the report also illustrates a different investment strategy from other years. Initially, we note that investments in late stage, category B rose from 12% to 17% over one year. It was the British payment and advice platform for companies Checkout.com which concluded the largest round of funding, for an amount of one billion dollars, followed by the French Qonto and its 552 million dollars and the Italian Scalapay, specializing in split payment, for financing of 497 million. Secondly, the study illustrates that this strategic reorientation was made at the expense of investments in early stage, category A, down 3% compared to 2021.
European mergers/acquisitions are also up from the first quarter of 2021, rising from 68 to 76 for this year.
Another observation is that of the share of VCs in fintech financing, which remains particularly high. The latter largely dominate the ranking of investors, with at the top of the list, the German Global Founders Capital and its 28 participations. Then come the British DST Global and the Austrian Speedinvest, with a respective total of 11 and 10 investments.

© CB Insights

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