The Future of Fintech
October 2024
Key takeaways
Nearly 80%
Of fintech companies improved their YoY EBITDA margins
An increase from less than 50% in Q2 2022, demonstrating how founders remain laser-focused on improving efficiency.
23%
Improvement in burn rates from the peak in 2022
VC-backed fintechs are spending less to generate net-new recurring revenue.
28%
Of invested capital is coming from mega-deals of $200M or more
That’s down from 47% in 2021.
Source: SVB proprietary data and SVB analysis
AI natives outpace early adopters
Median value created per dollar invested is higher for fintechs with AI built natively with it, than for those that have adapted AI into their existing solutions.
Although fintechs founded since 2020 have yet to raise a single late-stage round, they’re already making a big impact in areas like compliance, insurance claims processing and capital markets intelligence.
Founders focused on optimizing their bottom line
EBITDA margins are improving for the vast majority of fintechs as companies respond to the multi-year drop in fintech fundraising by focusing on improving efficiencies.
While margins are improving, median EBITDA is -40% and falling. This suggests a sizable portion of these companies are “walking dead,” with no path to profitability or an exit.
Source: PitchBook Data Inc., SVB proprietary data and SVB analysis.
Source: PitchBook Data Inc. and SVB analysis.
End of the mega-deal era
Deals of $200M or more now account for just 28% of invested capital, down from 47% in 2021.
This trend may reflect a fundamental shift in the sector, as certain capital-intensive business models become less viable in a higher-interest-rate environment.
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