Analysis of Global FinTech Deal Activity

What happened in Fintech in 2025 and what’s behind it? Here is my behind-the-scenes summary based on the FT Partners 2025 Annual FinTech Almanac numbers. 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝘆: • Capital is concentrating into fewer, larger rounds as investors back proven platforms over early-stage fintechs. • Profitability and predictable revenue now matter more than growth alone, as higher cost of capital has reset how risk is priced. • Financial Management and WealthTech attract capital because banks and asset managers are still modernising core workflows around data, reporting, risk, and operations. • Crypto funding has shifted from speculation toward infrastructure. • Payments’ reduced share of financing reflects maturity of the core rails, with innovation moving to embedded and vertical-specific use cases. • Banking and lending funding is spread across specialised tools (onboarding, underwriting, compliance, servicing, etc) as most banks choose to modernise in layers and not by replacing their core in one go. • InsurTech investment is rising as insurers face worsening loss ratios (driven by climate volatility, inflation, and fraud) and use software to regain control over pricing, underwriting, and claims. • Capital is increasingly flowing to markets that combine fast-moving regulation, public-sector capital, and national digital rails (real-time payments, digital ID, open finance). • Mega-rounds are returning but mainly for scaled leaders, meaning this is not a generic market trend but focused on a small group of companies that already behave like infrastructure.   𝗠&𝗔 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝘆: • M&A activity is accelerating because many fintech categories are now mature, making consolidation the fastest way to expand. • Scaled fintechs are increasingly the buyers, using acquisitions to add capabilities faster than they could build internally. • Acquisitions are focused on filling product gaps (risk, data, compliance, embedded payments, fraud) rather than buying growth. • Payments M&A is driven by margin pressure and intense competition, with players buying scale and efficiency rather than chasing new geographies. • Financial Management and WealthTech M&A is driven by demand for platforms that already sit at the centre of financial operations. • Crypto M&A is selective, targeting regulated, compliant infrastructure rather than consumer-facing speculation. • Cross-border M&A is rising as fintechs use acquisitions to enter regulated markets faster than licensing alone would allow. • Private equity is accelerating as many strong fintechs generate cash but lack public-market scale, making them attractive candidates. What are the trends that you see continuing in 2026? What did I miss? Opinions: my own, Graphic source: FT Partners 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

State of #fintech at the end of Q3’2024 by CB Insights Global Funding Trends: 🔵 Fintech #funding fell to $7.3B in Q3’24, a 25% quarter-over-quarter (QoQ) drop. However, the decline adjusts to 13% when excluding large deals from the prior quarter (e.g., Stripe, AlphaSense) 🔵 The average deal size in 2024 remains steady at $12.7M, reflecting a focus on fewer, higher-value #investments despite a 16% drop in total deal volume, reaching the lowest level since 2017. Geographic Insights: 🟠 Emerging Markets Lead Early-Stage Deals: 52% of early-stage deals occurred outside traditional hubs (e.g., US, UK), favoring regions like India, France, and Kenya Sector-Specific Trends: 🟢 Wealth Tech: Notable funding increase with a focus on solutions targeting niche demographics, such as medical professionals. #Wealthtech saw a 67% increase in funding QoQ, driven by significant deals such as Human Interest ($242M) and Earned Wealth ($200M) 🟢 Digital Lending: Continued activity in Asia and the US, with standout deals like DMI Finance ($334M) and MNT-Halan ($158M) 🟢 Payments and Insurtech: Both sectors experienced declines but retained pockets of high-value activity, particularly in #insurance #innovation Investor and Exit Activity: 🟣 #VentureCapital Shift: VC investments accounted for 29% of deals, highlighting a cautious but persistent interest in fintech 🟣 Exits: M&A dominated the exit landscape, with fewer IPOs or SPACs, indicating a shift toward #consolidation over public market enthusiasm. So what does all this mean for the near future? ♻️ We are entering a consolidation phase: With deal volumes at a historic low, the industry is undergoing a consolidation phase. Expect M&A to drive market realignments, especially in crowded subsectors like #payments and lending. ♻️ Increased focus on Emerging Markets: The shift toward less-crowded geographies reflects the untapped potential in markets like #Africa and parts of Asia. Companies targeting these regions may enjoy less competition and high growth prospects. ♻️ Selective Investment Persists: Investors are prioritizing fewer, higher-quality deals. #Startups will face increased pressure to demonstrate solid unit economics and scalability before securing funding. ♻️ Some Sectoral Bright Spots: The wealth tech boom signals a growing appetite for personalized financial management solutions. #Insurtech and #lending (especially in the small business) innovation remain attractive as they address core pain points with digital solutions. ♻️ Challenges for #Unicorns: The slowed rate of unicorn births underscores a recalibration of valuations. Companies aspiring to cross this threshold will likely need to showcase strong #profitability or growth metrics. Also, some of the existing unicorns 🦄 will lose their wings 🪽 if they test the market

State of Fintech Q1’26 Report Fintech deal count fell to 762 in Q1’26, a multi-year low reflecting declining deal count in 7 of the last 8 quarters. Meanwhile, funding dollars returned to prior levels after a Q4’25 spike. Banking capital is shifting towards challengers Late-stage deal share in banking hit 35% in Q1’26, more than 2x the quarterly average 2024-2025. At the same time, total banking deals fell to 34 (a multi-year low), and total funding dropped to $932M, roughly half of Q1’25’s $1.8B. The capital still moving into banking is going to scaled competitors, not partners. Of the top 10 banking deals this quarter, 8 went to companies competing directly with banks for deposits and customer relationships. Only 2 (Bretton AI and Lumin Digital), went to companies serving incumbents. The three largest challenger raises: -> Uala (Mosaic score 846, top 1% of private companies) raised $195M at a $3.2B valuation targeting consumer banking across Latin America -> Allica Bank (Mosaic score 876, top 1% of private companies) raised $150M at $1.2B focused on UK business banking -> Anchorage Digital (Mosaic score 900, top 1% of private companies) raised $100M at a $4.2B valuation building federally chartered crypto banking infrastructure Meanwhile, funding for banking enablers, such as core systems and digital onboarding, declined. Incumbents are acquiring into fintech’s fastest-growing segments Fintech M&A fell to 199 deals in Q1’26, down 26% from Q4’25, a six-quarter low. But the headline deals this quarter were concentrated in fintech segments that saw outsized funding growth in 2024–2025. Capital One completed its $5.15B acquisition of Brex, expanding into spend management, a market that saw 4x funding growth from 2024 to 2025. Fireblocks acquired Tres Finance in crypto accounting and tax reporting, up 3x over the same period. Mastercard announced a $1.8B deal for BVNK (pending regulatory approval) in crypto payment processing, up 3.5x. The broad M&A spike is over. What’s replacing it is targeted: incumbents acquiring into categories where upstarts have already built momentum. Crypto companies command record valuations per employee Valuation per employee cuts through round size to show where investors are placing the highest-conviction bets on the smallest teams. The average across all fintechs that raised in Q1’26 is $3.5M per employee. For digital assets companies, it’s $6.4M, nearly 2x the broader fintech average. Seven of the top 10 highest-valued fintech teams this quarter are crypto companies. Three examples from Q1’26: -> QFEX (6 employees) hit a $95M seed valuation with a hybrid derivatives exchange pairing centralized order matching with on-chain settlement, targeting retail and institutional crypto trading volume in a single product -> Warden (15 employees) is valued at $200M to build the compliance and custody layer institutional players need as they go deeper on-chain Report by CB Insights

⭐ FT Partners is pleased to announce the publication of our 2024 FinTech Almanac report, providing the most comprehensive review of global #FinTech deal activity with analysis across private company financings, IPOs, and M&A transactions.    📊 Read or download the full report below or here: https://lnkd.in/efBjK6cN   💰 2024 FinTech transaction activity highlights: • When excluding $1 billion+ capital raises from both 2023 and 2024, private company financing volume rose a modest 13% year-over-year. • By way of number of capital raises, 2024 far outpaced the lull experienced in 2023, increasing nearly 30%. • Seed and Series A funding volume was nearly 2x higher than 2020, largely driven by a surge of investments in Crypto & Blockchain. • While late-stage funding activity did not return as prominently, there were eleven more $100 million+ capital raises in 2024 compared to 2023 and several significant valuation increases announced throughout the year like for Stripe ($70 billion), Revolut ($45 billion), Rippling ($14 billion), Ramp ($8 billion), and Monzo Bank ($5 billion). • #ConsumerFinTech mounted a comeback during the year as four out of the top five largest venture rounds were for consumer brands (Abound, Monzo Bank, Ualá and Zepz). • While other regions plateaued or experienced slight declines in 2024, #LatAm FinTech funding volume grew 70% year-over-year, with large raises for companies like Ualá, ASAAS, Celcoin, Contabilizei, Stori, and Clip. • The most active investors during the year included many crypto-focused VCs and strategic investors - Robot Ventures, OKX Ventures, Big Brain Holdings, Polychain Capital, and Animoca Brands. When excluding crypto investments, QED Investors, Citi Ventures, General Catalyst, Andreessen Horowitz and Anthemis Group join the top ranking. • With a total of eleven global IPOs in 2024, IPO activity during the year made small gains over 2023, which had just six international IPOs and no US IPOs. • M&A activity strengthened in 2024 with deal count growing 25% and announced dollar volume rising 80% year-over-year. • Volume was prominently boosted by the pending $35 billion Capital One / Discover Financial Services merger as well as 28 $1 billion+ private equity buyouts, ten of which were take-privates. • Acquisitions made by scaled FinTech companies – like Stripe’s $1.1 billion acquisition of stablecoin infrastructure player Bridge – actually outpaced the level in each of the prior three years, while the number made by large strategics has not yet caught up to where it was in 2021.

Boston Consulting Group (BCG) FinTech Q1 2025: 7 Insights You Can’t Ignore Integration and straight-through processing are no longer “nice-to-haves.” They are the essential foundations shaping where capital flows — and where value is created. Here’s what’s happening: ⸻ 1. Stabilized Funding at ~$10B Signals Market Maturity • Investors are doubling down on mature, integrated FinTechs. 2. M&A is Focused on Synergies and Integration • 150+ deals this quarter emphasized platform and tech integration over pure revenue growth. 3. Late-Stage FinTechs (Series C-E+) Dominate Funding • Investors are shifting capital toward firms with scalable, integrated business models. 4. EMEA Surges as Americas and APAC Lag • EMEA funding +72% YoY, driven by trading and payments infrastructure — sectors built on STP. 5. Payments Platforms Lead — Especially Digital Retail and Acquiring Solutions • Payments accounted for 24% of total cumulative funding. • Acquiring and Digital Retail Payments sectors up 191% and 384% YoY respectively. 6. Public FinTech Revenue Multiples Stabilize at 4–5x • Markets are rewarding operationally efficient, integration-first models. 7. Mega Deals Cluster Around Core Financial Infrastructure • Six EMEA deals made up 60% of funding — primarily infrastructure and payments platforms. ⸻ The Bottom Line: Future leaders won’t just offer financial products — they’ll deliver seamless, fully integrated financial ecosystems with straight-through processing as the operational standard.

Fintech exits just hit a 3-year high. After a few years of wait-and-see, fintech's exit market is accelerating, and we’re going to have A LOT to talk about at Money20/20 in Vegas in three weeks. Q3'25 saw 249 M&A deals and 15 IPOs, three and four-year highs, respectively. But, those deals are sooooo Q3’25. What does fintech's exit recovery and the latest data signal about the technologies that will dominate the coming wave of exits, consolidation, and strategic priorities for investors and acquirers? ↳ Stablecoin infrastructure & payments rails: Banks, payment processors, and crypto natives are paying premiums for compliant on/off-ramps and settlement infrastructure as institutional adoption scales. ↳ AI-native fintech platforms: Five of Q3's top 10 funding deals went to AI-powered finance platforms. Acquirers know AI leaders will widen competitive gaps; expect strategic acquisitions before these companies even consider going public. ↳ Embedded finance & banking-as-a-service: As distribution becomes the moat, expect consolidation among BaaS providers and aggressive M&A from non-financial companies building financial products into their ecosystems. ↳ Wealth tech & digital asset custody: With 3 of the 5 fastest-growing fintech hiring markets in wealth tech, institutions are building or buying the infrastructure to serve retail and institutional demand for private markets and digital assets. Prep for Money20/20 by reading our co-produced State of Fintech Q3'25: https://lnkd.in/gEN5XyKt h/t for the awesome work on the report by Micky Tesfaye, Laura Kennedy, and Aisha Chandraker.

Key Highlights from the QED-BCG Global Fintech Report 2025 📈 Accelerated Growth and Profitability • Revenue Surge: Fintech revenues grew by 21% in 2024, up from 13% in 2023, significantly outpacing the traditional financial services sector, which grew by only 6%. • Profitability Milestone: 69% of public fintech companies reported profits, a substantial increase from less than 50% the previous year. • EBITDA Margins: Average EBITDA margins for public fintechs rose to 16%, reflecting improved operational efficiency. 🏆 Emergence of Scaled Winners • Revenue Concentration: Approximately 60% of global fintech revenue is generated by fewer than 100 companies, each with over $500 million in annual revenue. • Dominant Verticals: Payments: Leading the sector with $126 billion in revenue, driven by digital wallets and merchant acquiring. Challenger Banks: Contributing $27 billion, with notable players like Revolut and Nubank. Retail Crypto Trading and Brokerage: Generating $16 billion. Buy Now, Pay Later (BNPL)/Point of Sale (POS) Lending: Accounting for $8 billion, showing rapid growth. 🤖 Technological Advancements • Agentic AI: Identified as a transformative force, agentic AI is expected to revolutionize commerce, vertical SaaS, and personal financial management. • AI Adoption: Early-stage fintechs are leading in AI integration, particularly in software development, setting the stage for broader industry adoption. 🌍 Global Market Opportunities • Market Penetration: Despite growth, fintechs have penetrated only about 3% of global banking and insurance revenue pools, indicating substantial room for expansion. 📊 Investment Landscape • IPO Readiness: Approximately 150 private fintechs founded before 2016, each with over $500 million in cumulative equity funding, are poised for public offerings. • Private Credit: Emerging as a significant funding source, with a $280 billion opportunity identified for fintech-originated loans.

🤩 It's here! We’re excited to release our F-Prime Capital 𝟮𝟬𝟮𝟰 𝗦𝘁𝗮𝘁𝗲 𝗼𝗳 𝗙𝗶𝗻𝘁𝗲𝗰𝗵 𝗥𝗲𝗽𝗼𝗿𝘁. Here are some of my personal favorite learnings ✨ 1️⃣ 𝙏𝙝𝙚 𝙘𝙤𝙧𝙧𝙚𝙘𝙩𝙞𝙤𝙣 𝙞𝙨 𝙨𝙩𝙞𝙡𝙡 𝙧𝙞𝙥𝙥𝙡𝙞𝙣𝙜 𝙩𝙝𝙧𝙤𝙪𝙜𝙝 𝙥𝙧𝙞𝙫𝙖𝙩𝙚 𝙢𝙖𝙧𝙠𝙚𝙩𝙨. Deal volume dropped 50% from 2022 to 2023. Pre-money valuations across all stages are higher than in 2019, but Series A and B have not yet bounced back from 2022, suggesting trouble proving product-market fit. Series C and D rebound figures show a survivorship bias and dry powder. 2️⃣ 𝙊𝙛 𝙩𝙝𝙚 𝟖𝟏𝟗 𝙨𝙩𝙖𝙧𝙩𝙪𝙥𝙨 𝙩𝙝𝙖𝙩 𝙧𝙖𝙞𝙨𝙚𝙙 𝙖 𝙎𝙚𝙧𝙞𝙚𝙨 𝘼 𝙞𝙣 𝟐𝟎𝟐𝟏, 𝙖𝙛𝙩𝙚𝙧 𝙩𝙬𝙤 𝙮𝙚𝙖𝙧𝙨, 𝟒𝟑% 𝙝𝙖𝙫𝙚 𝙣𝙤𝙩 𝙮𝙚𝙩 𝙖𝙣𝙣𝙤𝙪𝙣𝙘𝙚𝙙 𝙖 𝙎𝙚𝙧𝙞𝙚𝙨 𝘽, 𝙖 𝙗𝙧𝙞𝙙𝙜𝙚 𝙧𝙤𝙪𝙣𝙙, 𝙤𝙧 𝙖𝙘𝙦𝙪𝙞𝙨𝙞𝙩𝙞𝙤𝙣 𝙤𝙛𝙛𝙚𝙧𝙨. Most will need to raise or find a suitable landing in 2024. That figure is more than double the typical 20% startup failure rate as defined by the Kauffman Foundation’s benchmark. 3️⃣ 𝙈&𝘼 𝙖𝙘𝙩𝙞𝙫𝙞𝙩𝙮 𝙛𝙚𝙡𝙡 𝙩𝙤 𝙞𝙩𝙨 𝙡𝙤𝙬𝙚𝙨𝙩 𝙡𝙚𝙫𝙚𝙡 𝙞𝙣 𝟓 𝙮𝙚𝙖𝙧𝙨 — last year’s $98B in fintech M&A pales in comparison to 2021’s $349B. And the highest deal valuations are still orders of magnitude lower than 2021 prices for both strategic and PE buyers. SVB’s collapse, high interest rates, strategic buyers’ focus on reducing op-ex, and lack of agreement on clearing price all contributed. However, we do see increasing momentum heading into 2024. 4️⃣ 𝘼 𝙙𝙚𝙘𝙖𝙙𝙚 𝙞𝙣𝙩𝙤 𝙩𝙝𝙚 𝙛𝙞𝙣𝙩𝙚𝙘𝙝 𝙚𝙧𝙖, it is becoming clear where startups have disrupted existing financial services (i.e., software-based payments, BNPL, and commission-free trading) and where they were outmaneuvered or outlasted by incumbents (i.e., robo-advisors, peer-to-peer lending, D2C insurtech). 5️⃣ 𝙄𝙣 𝙖𝙜𝙜𝙧𝙚𝙜𝙖𝙩𝙚, 𝙛𝙞𝙣𝙩𝙚𝙘𝙝 𝙘𝙤𝙢𝙥𝙖𝙣𝙞𝙚𝙨 𝙝𝙖𝙫𝙚 𝙘𝙖𝙥𝙩𝙪𝙧𝙚𝙙 <𝟏𝟎% 𝙤𝙛 𝙛𝙞𝙣𝙖𝙣𝙘𝙞𝙖𝙡 𝙨𝙚𝙧𝙫𝙞𝙘𝙚𝙨 𝙧𝙚𝙫𝙚𝙣𝙪𝙚, yet many scaled private fintech companies are generating $1B+ revenue, still growing rapidly, and expected to list in public markets. To access the full report and join a team discussion of the report, head over to the F-Prime Fintech Index via the link in the comments. ⬇ #StateofFintech #Fintech #FintechIndex #tech #venturecapital David Jegen, Abdul Abdirahman, Sarah Lamont, John Lin, Zoey Tang, Am Ramesh

𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗘𝗾𝘂𝗶𝘁𝘆’𝘀 𝗥𝗼𝗹𝗲 𝗶𝗻 𝗙𝗶𝗻𝘁𝗲𝗰𝗵: 𝗔 𝗠𝗮𝗿𝗸𝗲𝘁 𝗮𝘁 𝗮𝗻 𝗜𝗻𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗣𝗼𝗶𝗻𝘁 Global fintech investment fell to a seven-year low in 2024, with private equity participation dropping sharply from $10.5B in 2023 to just $2.55B. Caution has dominated the sector as firms reassess valuations, liquidity constraints, and exit opportunities. But is a turning point ahead?   𝗗𝗲𝗮𝗹 𝗙𝗹𝗼𝘄 𝗶𝘀 𝗥𝗲𝘁𝘂𝗿𝗻𝗶𝗻𝗴: Q4’24 saw an uptick in M&A activity, with fintech investors focusing on consolidation and strategic acquisitions over high-risk plays.   𝗗𝗿𝘆 𝗣𝗼𝘄𝗱𝗲𝗿 𝗠𝗲𝗲𝘁𝘀 𝗥𝗲𝗻𝗲𝘄𝗲𝗱 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁: With interest rates having come down and valuations stabilizing, PE firms will likely reenter fintech with a more disciplined, value-driven approach in 2025. The pressure to deploy capital remains strong.   𝗦𝗲𝗰𝗼𝗻𝗱𝗮𝗿𝘆 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗥𝗶𝘀𝗲—𝗕𝘂𝘁 𝗣𝗮𝘁𝗶𝗲𝗻𝗰𝗲 𝗶𝘀 𝗟𝗶𝗺𝗶𝘁𝗲𝗱: The sluggish exit market has driven increased interest in continuation funds and secondary transactions as PE firms seek alternative liquidity options. However, there is only so much time these structures can buy. Ultimately, firms will need to sell assets and generate real liquidity.   While fintech investment remains well below its peak, 2025 could mark a rebound—one shaped by smarter, more strategic capital deployment rather than the high-velocity deals of previous years.   Read more in the latest KPMG Pulse of Fintech report: https://lnkd.in/gayzDGrX.   #KPMGPrivateEquity #FintechInvestment #MergersAndAcquisitions #ValueCreation

“Sticky Situation” – a cartoon that illustrates how the FinTech market is still struggling after engorging in capital in the early 2020s. In 2021, worldwide fintech funding hit a record of $239 billion, according to KPMG. Companies like Block, Affirm, Klarna, and Revolut achieved multibillion-dollar valuations. However, by mid-2024, investment levels dropped significantly, with FinTechs worldwide raising only $52 billion. There are some bright spots, such as Revolut’s recent secondary share sale that increased its valuation to $45 billion (36% increase on the last valuation in 2021), Ramp’s $150 million Series D, and Altruist’s $169 million Series E. However, the FinTech industry is seeing shutdowns (e.g. Talley and Totem in the last couple of weeks) and layoffs that are around 10-20% of the workforce (e.g. Block, Intuit, NCR Voyix). According to Boston Consulting Group (BCG) and QED Investors’ latest global FinTech report, there is more “redesigning” to come as they noted that “many FinTechs have yet to apply [cost reduction practices] comprehensively.” In reflection, Fintech M&A, driven by this difficult funding and IPO landscape, is outpacing last year’s activity. In 2023, the total value of fintech M&A deals reached $59 billion—by mid-2024, that figure has already hit $33 billion. There are also still some regulatory headwinds around banking rail partnerships that need to be worked out coming on the back of the collapse of Synapse and Railsr. But, the FinTech market is little different than most others private markets, the pandemic credit boom and the lack of exits has gummed up the system. As Tom Callahan, Nasdaq Private Market CEO, remarked “For private companies, there’s a conveyor belt, and that conveyor belt is kind of broken right now… And while things have improved from 2023, it’s still incredibly challenging. It’s a bit like a game of musical chairs—there are too many private companies, and too little capital out there for all of them.”