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US and UK fintech funding falls sharply in 2023

US and UK fintech funding falls sharply in 2023

Investment into US and UK fintech startups experienced sharp declines in 2023, with inflation, increased interest rates, geopolitical issues, and other macroeconomic conditions all hitting valuations and deal activity.

The US fintech startup scene is the highest-funded ecosystem in 2023 on a global scale. However, this sector reported a 36% decline in funding in 2023 to $18.2 billion, when compared with the $56.3 billion raised in 2022, according to figures from Indian analyst group Tracxn.

The downturn in the UK was even more pronounced, with just $4.3 billion raised in 2023, a 68% slump on the $11.2 billion invested the previous year.

While late-stage funding in the US was least affected, declining by 18%, the UK witnessed a more precipitous drop, down by 60%.

Only four new Unicorns emerged in the US fintech space in 2023, a sharp contrast from 29 in the previous year. Kin, SageSure, Lendbuzz, and Vestwell crossed the $1 billion valuation mark after raising at least $200 million each in 2023.

There has been a downward trend in terms of acquisitions as well in both the US and UK. The number of acquisitions in the US market fell to 172 in 2023, from 247 in 2022 and 319 in 2021. The UK experienced a marginal decline to 66 acquisitions last year, down from 70 in 2022 and 95 in 2021.

Comments: (2)

Vladimir Dimitroff
Vladimir Dimitroff - Senior Executives Forum - London 08 January, 2024, 17:50Be the first to give this comment the thumbs up 0 likes

Not a market 'crash', more of a 'correction' ;)  Doesn't mean the Fintech bubble is over, there is still plenty of activity (and some interesting cases) - just deals became smaller in both valuations and funding raised. And fewer, for sure - making it less of a sure-fire way to enjoy lavish lifestye for 2-3 years on other people's money you don't have to return when you quit...

Sarcasm apart, life became somewhat tougher for the average startup, but good businesses are stillgetting funded and will continue to attract investment as long as they are... good.

Pablo Schor
Pablo Schor - Sofiana - Atlanta 09 January, 2024, 22:11Be the first to give this comment the thumbs up 0 likes

There's plenty of AI-based use cases in fintech that are in a very early stage, look at Sofiana.ai or SPIN analytics