Last holiday season, venture investors were pouring cash into high-flying startups—in particular, the hot fintech space—at a rapid pace. This year, the boom is over. VCs may be steeling themselves for a rockier funding environment in 2023, but they say they're excited for what's to come for fintech—and they're getting creative. "I felt like fintech became so overrun, almost, with investors in 2021, and now I think the tourists have [fled]," says Christina Melas-Kyriazi, a partner at Bain Capital Ventures.
VCs plowed a record $87.2 billion into fintech in 2021, over 140% higher than 2019, per PitchBook data. As the macroeconomic environment has soured in 2022, with interest rates skyrocketing and the economy teetering, VC deal value for fintech startups has fallen to $41.6 billion through the third quarter, down nearly 38% from 2021, per PitchBook. Meanwhile hot startups like Stripe competitor Checkout.com, which raised at a $40 billion valuation nearly a year ago, reportedly recently slashed its internal valuation to $11 billion.
