February 26, 2024

CB Insights posted Q2 State of Fintech Report Unsurprisingly, global funding in the sector fell last week – plunging It nearly halved to $7.8 billion, the lowest level since 2017.

But at least one region had a decent quarter.

latin american experience Global investor interest surges Venture capital investment in the region, like the rest of the world, has declined in recent years.

Venture capital investors spent $7.8 billion on 1,114 deals in Latin America in 2022, an all-time high, down from $15.9 billion in 2021, according to the data. Latin American Private Capital Association (LAVCA)). The fintech industry is by far the largest recipient of venture capital investment in 2022, accounting for 29% of investment last year.

Investors in the region appear to be continuing to bet on the sector. In fact, according to CB Insights’ Q2 State of Fintech report, fintech companies in Latin America and the Caribbean attracted $500 million, a 150% increase quarter-on-quarter, while the number of deals (69) was roughly flat quarter-on-quarter. The report found that the share of early-stage deals will reach 81% by 2023, a five-year high. The region’s largest deal of the quarter was Cayman Islands-based DeFi platform Kross Wallet, which raised a $100 million seed round. (Blockchain and cryptocurrency companies are counted as fintechs in CB Insights’ data.) Other deals in the quarter included $60 million for Mexican spending management startup Clara and $26 million for Brazilian payments infrastructure company Liquido. (It’s worth noting that these rounds were actually raised in 2021, but because it’s operating in secrecy, Liquido only recently announced the funding.)

But overall, the second quarter was not good for payments startups, Despite a strong start to the year for the industry. Funding for such companies plummeted 75% during the quarter, falling to $2 billion from $8 billion in Q1 and $4.9 billion in Q2 2022. CB Insights notes that this is the “lowest level of funding for the industry in six years”. And there are no new unicorns.

Although investments fell 14% to 148 deals in the second quarter from 172 deals in the first quarter, deal volume was not affected as badly. One bright spot was the highest level of early-stage funding for payments companies in five years.

Tipalti, It automates accounts payable for middle market companies, Made the highest equity deal of the quarter, raising $150 million in a growth round and adding to its impressive list of mega-investments such as Series F financing of 270 million US dollars and $150 million in Series E financing.others on the list include Nimbus, Clara, volt, Spiff and Episode Six.

Finally, all 5 IPO exits this quarter were from fintech companies outside the US, 4 of which were from Asia. Additionally, fintech M&A activity fell by 20%, with 142 exits, according to CB Insights.

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