- Fintechs raised $132 billion in 2021, an all-time high.
- This year, we predict fintech funding will exceed the $150 billion mark as several areas, like blockchain and B2B tech firms, attract a wide pool of investors.
- Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Fintech industry. Learn more about becoming a client.
The news: CB Insights’ 2021 State of Venture Report confirms fintech funding smashed several records last year, with $132 billion raised. Fintechs captured $1 in every $5 from venture capital firms.
Insider Intelligence
Fintech funding by the numbers: Volume, exits, and early-stage deals all ticked up last year.
Fintech funding surged by 169% from 2020 to $131.5 billion in 2021— the most funding on record.
Q4 funding was the second-largest quarterly haul in history, at $34.9 billion, which included crypto tech firm NYDIG’s last-minute $1 billion raise.
There were also a record number of M&A, IPO, and
SPAC
exits—M&A and IPOs peaked in Q4.
And the proportion of early stage deals also ticked up from 61% to 64%, suggesting that younger startups weren’t missing out despite the mega-rounds that stole headlines.
What’s coming in 2022? We predict fintech funding will surpass 2021 levels and exceed the $150 billion mark as several areas, like blockchain and B2B tech firms, attract a wide pool of investors.
New tech applications like open finance and blockchain will grab a wider pool of global investors, including hedge funds.
Crypto exchanges will also keep raising an abundance of capital. Despite recent
volatility
, leading financial institutions like Goldman Sachs are still bullish about crypto prices.
And large firms are still digitizing—S&P 500 companies will increase their capital expenditures and research and development investment by 18% this year from 2019 levels, per Goldman Sachs.
But a staggering 94% of financial services firms said they’re struggling with the frenetic pace of digital transformation of the past two years, per a survey from ITRS Group.
As large firms both ramp up investments in and struggle to digitize, B2B fintechs that can provide white-label solutions or the infrastructure to build them in-house will attract funding.
And several recent venture capital war chests focused on fintechs—including Ribbit Capital’s $1.5 billion pot—also augur elevated investment in the sector.
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