A few months ago we opined here on the Finovate blog that the funding woes that had plagued fintech in the first half of 2023 might abate in the second half.
If Q3 is any indication, then it will have to be the fourth quarter of the year when that happens.
Eight Finovate alums raised more than $293 million in Q3 of 2023. The number of alums raising funding was consistent with last year’s total. But the overall level of funding for Finovate alums was down from previous third quarters. In fact, the last time Q3 alum funding was less than $1 billion was in 2018, when 19 alums raised $400 million.
Admittedly, two of the eight alums to report funding in the third quarter of 2023 did not disclose funding amounts. This means that the total investment for Finovate alums in Q3 could be significantly higher than what is known today. And it was interesting to note how many fintechs that did secure investment over the summer months were headquartered in developing markets. But that aside, for markets in the U.S., the U.K., and Europe, in particular, the fintech funding drought continues to define the terrain.
Previous Quarterly Comparisons
- Q3 2022: More than $1 billion raised by eight alums
- Q3 2021: More than $1.1 billion raised by 14 alums
- Q3 2020: More than $1.2 billion raised by 14 alums
- Q3 2019: More than $1 billion raised by 21 alums
Top Equity Investments for Q3 2023
The top equity investment of the quarter among Finovate alums was clearly the $110 million raised by SpyCloud. The company, which won Best of Show in its Finovate debut at FinovateFall in 2017, specializes in helping businesses fight account takeover fraud, as well as other types of cybercrime.
Headquartered in Austin, Texas, and founded in 2016, SpyCloud gives organizations visibility into exposed credentials actively traded on the dark web. In response, SpyCloud’s platform not only uncovers these stolen credentials, but also leads to the capture of 40 million exposed assets every week. The company’s Q3 investment takes its total equity funding to more than $168 million.
Also noteworthy in the third quarter were the investments secured by Tradeshift ($70 million), ThetaRay ($57 million), and Splitit ($50 million).
Here is our detailed alum funding report for Q3 2023.
July 2023: More than $4.5 million raised by three alums
August 2023: More than $232 million raised by four alums
- Micronotes: $2 million – post
- Splitit: $50 million – post
- SpyCloud: $110 million – post
- Tradeshift: $70 million – post
September 2023: $57 million raised by one alum
If you are a Finovate alum that raised money in the third quarter of 2023 and do not see your company listed, please drop us a note at research@finovate.com. We would love to share the good news! Funding received prior to becoming an alum not included.