The Future of Fintech
2023
Key takeaways
57%
Of VC-backed fintech companies are sitting on more than a year of reserves
Fintechs have fared better than other tech companies at extending runway during the VC slowdown, thanks to ample fundraising during the 2021 runup and significant cost-cutting.
43%
Higher valuation for Series A fintech deals relative to Series A deals across all tech sectors
Despite headwinds, investors remain optimistic about the long-term promise of the fintech space.
$45M
Median disclosed deal size for payments startups
Payments remains the top-valued subsector in fintech for the third straight year. The immense market potential of embedded payments is driving optimism in the space, even as VC funding declines from prior highs.
Cash reserves are dropping
Although cash reserves are dwindling across the US innovation economy, on average, fintechs have extended their available runway more than the tech sector as a whole. Still, at current burn rates, most will need to raise cash by this time next year, based on our proprietary data.
Early-stage fintechs are more vulnerable than their later-stage counterparts, which tend to burn less on a relative basis. Most later-stage fintechs also added to their reserves with substantial fundraising in the boom times of 2021.
Source: SVB proprietary data and SVB analysis
Source: Source: Preqin, PitchBook and SVB analysis
Valuations rise as funding volume drops
While VC investment in blockchain is decelerating, valuations have spiked, especially at the early stage. The median pre-money valuation for a Series A blockchain deal jumped 56% in 2023 to $95M.
An ongoing slowdown in the blockchain investment cycle isn’t diminishing the promise investors see in individual deals. A rise in digital asset prices and a move toward more regulatory clarity is boosting that confidence, as momentum builds for the next wave of blockchain’s development.
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