State of Global Fintech: Funding Trends and Market Evolution
Fintech funding and dealmaking declined again year-over-year (YoY) in 2024, hitting their lowest levels in 7 years. However, some positive signals are emerging, including growing deal sizes and a pickup in M&A, with a focus on cybersecurity capabilities. The annual decline in funding was fintech’s smallest in 3 years. Meanwhile, at the quarterly level, funding rebounded to close the year strong, increasing 11% QoQ to reach $8.5B in Q4’24.
The Current State of Fintech in 2024
In 2024, annual fintech funding and dealmaking both decreased YoY, hitting 7-year lows. While deals dropped by 17% YoY to a total of 3,580, funding fell by 20% to $33.7B. Despite this, the market is showing signs of steadying. Following 2 consecutive years of decline, the median deal size in fintech jumped 33% YoY in 2024. The median fintech deal size increased to $4M in 2024 — marking a 33% jump YoY — with deal sizes rising across every major global region. This shift reflects increased investor selectivity in the current market, as companies that pass more rigorous due diligence are attracting larger investments.
Key Data Comparison
| Metric | 2023 Performance | 2024 Performance |
|---|---|---|
| Global Funding | $39.2B | $33.7B |
| Deal Volume | 3,801 | 3,580 |
| Median Deal Size | $3.2M | $4M |
Sector Highlights: Banking and Payments
Across fintech sectors, the biggest jump occurred in banking, where the median deal size rose by 70% YoY to reach $8.5M. Mature banking companies are catching the eyes of investors. Banking saw mid- and late-stage deals rise to 38% of its total deal volume in 2024 (vs. 21% in 2023), outpacing the 4 percentage point increase in fintech more broadly. Payments tech ends 2024 as a bright spot. Five of the top 10 equity deals in Q4’24 went to companies building payments solutions, from mobile payments apps to cross-border payments enablement tools to platforms digitizing B2B payments. This concentration of large deals within payments tech reflects the ongoing push to digitize commerce and business exchanges.
The Resurgence of M&A Activity
Fintech M&A exits jumped 24% quarter-over-quarter (QoQ) to 189 in Q4’24, with Stripe’s $1.1B purchase of stablecoin platform Bridge marking the quarter’s largest deal. Overall, fintech saw a total of 664 M&A exits in 2024 (up 6% YoY) as financial services companies sought to diversify their capabilities and build full-service platforms. US-based companies captured 8 of the largest 10 deals, including the top 5. Acquirers are boosting capabilities across functions. Bolstering cybersecurity was also a focus for acquirers in Q4’24, pointing to financial services companies’ push to integrate fraud detection in their product offerings.
Historical Context: 2022-2023
After a record 2021, global fintech funding cools in Q1'22, even as deals reach new heights across sectors and regions. Global fintech funding clocked in at $28.8B in Q1’22, down 18% quarter-over-quarter (QoQ) — the largest percentage drop in quarterly funding since 2018. By 2023, fintech startups hit a wall, with annual funding cut by half. Global fintech funding nosedived to $39.2B in 2023 (down 50% YoY), while deal volume slipped 38% to 3,801 — the lowest levels since 2017. In fact, in 2023, funding to fintech startups dropped off more severely than broader venture funding.
- Banking & Payments: Investment to banking startups has evaporated, with funding falling 72% in 2023.
- Regional Shifts: The US increased its dominance of fintech, drawing 41% of deals in 2023 — its highest share since 2016.
- Unicorn Births: Eight fintech unicorns were born in Q4’23 — a 6-quarter high, but far below 2021’s quarterly average.
