The first quarter of 2022 and the economic downturn in many areas was enough to raise serious doubts about the fintech ecosystem. But in the end, there was nothing to worry about. Over the first three months of the year, one in five dollars invested went to fintech, according to a report by CB Insights. In all, they managed to raise $28.8 billion in venture capital.
The performance was a little worse than that of the fourth quarter of 2021, but the number of transactions remained higher with 1,399 financing transactions compared to 1,305 over the previous period. At the start of 2021, there were 1,209 transactions. More importantly, the total amount raised in the first quarter of 2022 is already equivalent to more than half of the total amount over the year 2020.
The fintech landscape has changed
In two years, the fintech landscape has completely changed. And it's not just about corporate performance thanks to the massive presence of investors. In two years, the dynamics have passed from profession to profession, from product to product. Until being mainly intended today… for cryptocurrencies.
After neobanks, which attracted a large share of investment and attention in 2020, payment fintechs have taken over. In 2021, when savings were no longer worth anything and it was no longer possible to go have a drink on the terrace or buy a concert ticket, it was then the stock market investment applications and the marketplaces that have taken over.
Today, more than half of fintech investments have changed course to invest in crypto startups. “Most of the Q1 funding went to cryptocurrency and Web3 companies,” writes a Business Insider reporter, translating the CB Insights study. They represented 4 of the 10 biggest fundraisers of the quarter, along with Cross River, Fireblocks, ConsenSys and FTX.
Among investors, several funds specializing in the areas of crypto joined the top 10 in the first quarter. We note the presence of Animoca Brands, which has enabled the United States to collect the largest share of global investments, followed by Asia and Europe. Coinbase Ventures, the investment fund of the cryptocurrency exchange platform, made 20 investments in the first quarter of the year.
Although some funds like Tiger Global (39 operations in 2022) or Coinbase Ventures inject capital into large startups, 62% of operations were geared towards new player launches according to data from CB Insights.