We’re putting aside the IPO news cycle this morning to check in on the venture capital world and the fintech market in particular.
As we all know, fintech is booming: Between Robinhood and Public and M1 Finance raising competing rounds, payment-tech startup Finix moving to diversify its cap table, and ideas that work in one market finding purchase and capital in others, it’s a damn good time to build financial technology.
But perhaps even with all that recent knowledge, we’re still missing the point.
A provisional report from data and research group CB Insights indicates that we’re not merely in a warm period for fintech funding —we are in a period of all-time record investment for so-called mega-rounds, or investments of $100 million or more inside the fintech realm.
The first quarter of 2020 had stiff competition to overcome to set a mega-round record. The preceding period, Q4 2020, for example, saw 30 fintech rounds across the globe that were worth nine figures. But, to date, Q1 2021 is ahead and is thus guaranteed to set a new record, having already bested the preceding all-time high.
This morning we’re talking big money and fintech, with a splash of early-stage digging. I asked a CB Insights analyst about what appears to be falling fintech seed deal volume. Is this the result of data reporting delays inherent to seed data, the impact of SAFEs and other sorts of notes limiting visibility into the earliest stages of venture, or just a plain-old slowdown? Let’s find out.
Big, bigger, small, fewer
Per the interim CB Insights dataset, there have been some 33 fintech mega-rounds so far in 2021. For context, it’s more than 50% more such rounds in Q1 2020 and Q1 2019. Via the preliminary report, here’s the data: