Published On Feb 24, 2023
Fintech is the term widely used for technology startups focused on financial services. These fledgling companies were founded mostly in the last decade, with the goal of disrupting old-guard banks, insurers and credit card companies with whiz-bang tech. Only a few short years ago, venture capitalists couldn’t get enough of the sector. But with the IPO market in a coma and fintech stocks down 60% from their peaks, venture investors and bankers have turned off the cash spigot, not just for new investments but for additional funding to existing portfolio companies.
According to CB Insights, fintech funding sank to $11 billion in the fourth quarter of last year—the lowest level since 2018. A survey of 450 early-stage startups conducted last fall by January Ventures, a Boston-based venture firm, concluded that 81% had less than a year’s worth of cash on hand.
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