Fintech funding falls to lowest levels since 2017 as crypto surges

In simpler terms, the amount of money invested in fintech businesses globally decreased by 16% from the last quarter of 2023 to the first quarter of 2024, reaching a seven-year low. Surprisingly, there was an 11% increase in funding for ventures as a whole during this period.

CB Insights, an analytics company, published their Q1 2024 report on venture capital trends. They described the quarter as having “mixed results for the venture market,” with eight successive quarters showing a decrease in equity deals being a drawback. However, this was partially balanced out by significant investments in a few notable companies, such as Amazon’s $4 billion injection into Anthropic AI.

Venture funding

In the first quarter of 2024, venture funding amounted to $58.4 billion as per the latest data. This represents a 11% increase from the $52.8 billion raised in the previous quarter, signifying a potential recovery. However, it’s important to note that the total market still shows a decline of 21% compared to the same period in 2023, and a significant drop of 62% compared to Q1 2022.

In Q1 2024, the number of new unicorns, which are billion-dollar startups, decreased by approximately 17% compared to the previous quarter, with a total of 19 being created. This is a decrease from the 23 unicorns that emerged in the preceding quarter.

Fintech decline

The financing for fintech companies decreased by 16% from the last quarter of 2023 to the first quarter of 2024, according to the report. This drop brought the size of the fintech venture market back to where it was in 2017.

In the US, the main region where venture capitalists invest in fintech businesses, there has been a decrease in funding during this period. This downturn occurred concurrently with heightened FDIC oversight of partnerships between traditional banks and fintech firms.

Crypto surge

During Q1 2024, Bitcoin reached unprecedented peaks with a value of around $2.9 trillion, while the total market capitalization for all cryptocurrencies hit a quarterly record of $2.9 trillion. However, by the time this article was published in Q2 2024, the market cap had decreased to approximately $2.71 trillion.

In the last fortnight before the upcoming Bitcoin halving, we’re seeing market activity pick up. According to CryptoMoon’s latest report, some experts believe this could lead to a significant price increase – potentially as high as 160% – raising Bitcoin’s value from its current $70K to approximately $150K. However, other analysts have labeled the halving as a “sell the news” event.

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2024-04-09 21:08