Do any of these headlines sound familiar?
“Global fintech funding nearly halves to $23B in H1 2023”
“North American Startup Funding Fell Across All Stages in Q2”
“Most Active Investors Pare Dealmaking in First Half of 2023”
These are some of the recent headlines from sources such as Crunchbase News and S&P Global Market Intelligence. While there was some real enthusiasm around Generative AI as the summer began, the reality is that technology investors remain cautious in the face of inflationary fears, higher interest rates, and a number of high-profile blowups in some of the more speculative areas of technology. This challenge has been especially acute in fintech. Not only have concerns over COVID-era overinvestment and “malinvestment” been loud in this space, but also fintech has more direct exposure to some of the economic discontents mentioned above.
The retrenchment in fintech funding was in evidence during Q2 2023 for our Finovate alums, as well. Over the quarter, ten alums raised more than $209 million. This makes Q2 2023 one of the lowest quarters in terms of equity capital raised by our alums in many years. Note that two of the nine alums that reported receiving investment dollars in April, May, and June – Agent IQ and EverC – did not disclose the amounts of their fundings. Nevertheless, this quarter’s total is a clear reflection of the relative tepid investment climate across technology writ large.
Previous quarterly comparisons
- Q2 2022: More than $984 million raised by eight alums
- Q2 2021: More than $2.8 billion raised by 14 alums
- Q2 2020: More than $975 million raised by 15 alums
- Q2 2019: More than $1.8 billion raised by 29 alums
- Q2 2018: More than $1.5 billion raised by 26 alums
The biggest fundraising alum of the quarter was NYMBUS. The company enables financial institutions to digitally transform their operations through a variety of solutions including SmartCore, SmartPayments, and its standalone digital bank alternative, SmartLaunch. Founded in 2015 and headquartered in Jacksonville, Florida, NYBUS made its most recent Finovate appearance at FinovateFall 2019.
Top Equity Investments
- NYMBUS: $70 million
- PayNearMe: $45 million
- BioCatch: $40 million
Other big alumni fundraisers in Q2 2023 were PayNearMe and BioCatch, which raised $45 million and $40 million, respectively. PayNearMe is a three-time Finovate Best of Show winner, making its Finovate debut back in 2010. The Santa Clara, California based fintech offers a cash payments platform that facilitates online purchases and billpay.
Headquartered in Tel Aviv, Israel, BioCatch demoed its technology at FinovateFall in 2014. Since then, the behavioral biometrics innovator has grown into a major player in the advanced fraud protection industry. The firm continuously protects more than five billion sessions per month and serves more than 250 million users around the world. In 2022, BioCatch prevented more than $2 billion in fraud losses.
Here is our detailed alum funding report for Q2 2023.
April: More than $35 million raised by three alums
May: More than $127 million raised by five alums
- Agent IQ: undisclosed – post
- BioCatch: $40 million – post
- Cable: $11 million – post
- Kognitos: $6.75 million – post
- NYMBUS: $70 million – post
June: More than $47 million raised by two alums
If you are a Finovate alum that raised money in the second 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.