U.S. fundings during the fourth quarter included $358 million for accounting and finance startup Tryllian, $165 million for asset and trading company Uniswap, $153 million for accounting and finance startup Clearcover, $150 million for accounting and finance company Avant and $150 million for rent payments startup Bilt Rewards. 

New York-based Bilt Rewards, which offers users rewards points for rent payments, was the only payments company to make the list of top unicorn births in the fourth quarter. That startup, which also operates a co-branded credit card, had a valuation of $1.5 billion when it raised $150 million in October 2022.

The U.S. attracted the most fintech venture capital, followed by Europe, with $2.8 billion across 248 fintech funding deals, and Asia took the third spot, with $2.7 billion and 228 deals, CB Insights said. The U.S. also maintained its lead in global fintech deal share.

Reflecting the downdraft in the fintech and payments venture world, average and median deal sizes for fintech both dipped in 2022. Average deal size was $18.7 million last year, compared to $31.4 million in 2021. Median deal size clocked in at $4.3 million, down from $5 million the year prior, according to CB Insights.

Additionally, early-stage funding rounds made up 68% of fintech deal share in 2022, CB Insights said, while mid- and late-stage deals became less common. Funding has become especially difficult for more mature startups to secure, such as those seeking $100 million-plus. At that level, investors have become more skeptical of a startup’s plans for profitability and scale.

Among payments players, Stripe, which has duel headquarters in San Francisco and Dublin, U.K.-based Checkout.com and U.K.-based Revolut made the top 10 unicorns by valuation in the fourth quarter of 2022, with valuations of $95 billion, $40 billion and $33 billion, respectively. However, those valuations were based on their most recent funding rounds — which occurred prior to the tougher economic climate t and companies like Stripe and Checkout.com have cut their internal valuations in recent months. 

In fintech, merger and acquisition, initial public offering and special-purpose acquisition company (SPAC) activity dropped in 2022 compared to the prior year, CB Insights said. The top equity investment in fintech in the fourth quarter: JPMorgan Chase’s $869 million stake in Greek payments company Viva Wallet.

There were 742 fintech mergers or acquisitions last year, a 20% drop from 2021. Fintech M&A was at its lowest level all year in Q4, with 143 mergers and acquisitions.

There were 23 fintech IPOs last year, down 72% from 2021 and 9 SPACs in the arena, which was a 53% decline over the prior year.

By Caitlin Mullen on Jan 11, 2023
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