Global Fintech Funding Down By a Third in 2022 – S&P
(19 April 2023 – Global) Results from the S&P Global Market Intelligence’s Global Fintech Funding Trends report show that funding for financial technology firms fell to US$63 billion last year.
According to S&P Global Market Intelligence's Global Fintech Funding Trends report, the current uncertainty, amplified by the mid-March collapse of Silicon Valley Bank, will likely sink the amount of capital raised by fintech this year to where it was in 2020 when COVID-19 brought much of the world to a standstill.
Leading global markets witnessed downturns in 2022. Latin America faced the biggest drop at 59 percent, followed by North America at 34 percent, Europe, Middle East, and Africa (EMEA) at 19 percent and Asia Pacific (APAC) at 25 percent.
Venture capitalists may shift to less populated economies of the world where traditional finance is almost non-existent.
Fintech models such as payment orchestration, cross-border payments, sweep networks, and revenue financing could be attractive to venture capitalists in such regions. Additionally, middleware players who operate within the embedded finance sector could also be viewed as a safe investment.
“A challenging macro environment will likely nudge venture capitalists and startups to go back to the drawing board to reassess their risk tolerance and the market opportunity” the report stated.