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      State of Fintech 2022
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    The State of Fintech 2022

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    The data

     
    In our State of Fintech report, we dive into key trends and leverage our proprietary data to offer a unique perspective on the fintech industry. Here are some highlights:

    Industry trends

    -24%

    Change in pre-money valuations for Series C+ fintech deals from recent peak

    3.7x

    Web3 VC deal count growth from Q1 2019 to Q1 2022, higher than any other tech sector

    66%

    Share of fintech firms showing slower QoQ growth in Q3 2022
    Valuations

    High-flying valuations come in for a landing

     

    After intense deal competition helped turbocharge fintech valuations in 2021, VC-backed valuations are declining at all stages.

    The reset for Series C+ is most pronounced with a 24% decrease from the recent peak — marking a significant shift from October 2021, when the median valuation was $965 million, up 2x from October 2020.

    US Fintech Trailing 180 Day Pre-Money Valuation Index
    Notes: Median pre-money valuation for the trailing 180 days, smoothed with a 30-day moving average.
    Source: PitchBook and SVB analysis.    Caption
    US VC-Backed Fintech EBITDA Index
    Notes: Annualized median indexed to 100 at start of the period.
    Source: SVB proprietary data and SVB analysis.
    Burn rate

    Companies heed warnings to rein in spending

     

    According to SVB proprietary data, more fintech companies decreased net burn in Q3 2022 than at any point since the onset of the COVID-19 pandemic.

    The cuts help illustrate that companies are right-sizing their expenses to match decreased expectations for spending and slower revenue growth.

    Web3

    Web3 funding rush tapers off

     

    VC deal growth in web3 was higher than any other tech sector from 2019 to 2022, with company formations peaking at 237 in Q1 2022. However, formations are beginning to taper, falling by 43% since the peak

    The companies seeded from the 2017-18 crypto price boom — and the long tail afterward — built the infrastructure and applications that enabled the recent growth in user adoption. Now, the funds raised during the recent boom may build the foundation for the next Web3 wave.

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    Dan Allred Headshot
    Dan Allred
    |
    Senior Market Manager
    Jake Mendel Headshot
    Jake Mendel
    |
    Director, Crypto
    Jake Mendel is a director with the Startup Banking practice and has led the bank's early-stage Crypto team since 2022.
    Josh Pherigo Headshot
    Josh Pherigo
    |
    Senior Researcher, Market Insights
    Josh is a senior researcher for market insights which provides data-driven research and analyses on the innovation economy and venture ecosystem.
    Andrew Pardo Headshot
    Andrew Pardo
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    Sr. Associate, Research
    Andrew is a senior research associate responsible for conducting data-driven analyses on the innovation economy that SVB serves.
    Eli Oftedal Headshot
    Eli Oftedal
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    Senior Researcher, Market Insights
    Eli leverages SVB's proprietary data and unique perspective on the innovation economy to surface timely, actionable and data-driven insights.

    1 Forbes, as of June 2022

    This material including, without limitation, to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third-party sources that we believe to be reliable but which have not been independently verified by us, and for this reason, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. 

    The views expressed in this report are solely those of the author and do not necessarily reflect the views of SVB Financial Group, Silicon Valley Bank, or any of its affiliates.