I was worried about fintech a few months ago.
To some extent, I still am. After all, there’s a lot to worry about, from interest rate-induced pressures, to the prospect of increased scrutiny on the space. However, I’ve been feeling a bit more optimistic lately: There’s been a string of high-profile fintech funding rounds announced over the last few months, from Ramp’s $150 million Series D-2 (which bumped the company’s valuation to $7.65 billion) to Altruist’s $169 million Series E. A number of notable earlier-stage companies, like Savvy Wealth, have been getting funded, too.
Of course, that doesn’t mean the picture is looking better across the board. For example, just this week, we saw the shutdown of consumer-facing Tally. And worldwide tech investment (including private equity, VC, and M&A) dropped to $51.9 billion in the first half of this year, down from the $62.3 billion we saw in the second half of 2023, according to recently released data from KPMG. The first half of this year saw 2,255 deals, a slight decline from the latter half of last year’s 2,287 deals.
In the first half of this year, every noteworthy region saw overall fintech investment on the decline. In the Americas, fintech investment went from $38.5 billion in the second half of last year to $36 billion in the first half of this year. Private equity has especially been backing away—at the midyear mark in 2023, total PE fintech investment was $9.6 billion. This year, that number is $979 million. (Stripe’s $6.5 billion Series I in 2023 accounts heavily for this disparity.)
However, fintech M&A, perhaps as a result of the challenging funding and IPO environment, is pacing ahead of 2023. Last year, aggregate fintech deal value came in at $58.8 billion—and in 2024 that number is already at $32.6 billion. For fintech startups seeking an exit, and for acquirers looking for a bargain, striking a deal has obvious appeal.
I talked to Tom Callahan, Nasdaq Private Market CEO, about my fintech feelings. He says he thinks about fintech as “very story-by-story” right now—and that this all is far bigger than fintech anyway.
“I don’t think you should be worried about fintech any more than you should be worried about any other sector of the private markets,” said Callahan. “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.”
Add this all up, and the fintech sector ultimately looks just as entangled in mixed signals as the wider world of VCs and startups. There are high-profile success stories like Ramp and Altruist making headlines, despite the difficulties weighing on their fintech peers.
So perhaps feeling overly sanguine or pessimistic isn’t the right way to think about what’s going on in fintech right now. I think my spirits have been buoyed by talking to investors who believe that the worst has passed, and I’ve been watching as numerous great fintech funding rounds pass through my inbox.
So, it’s more a matter of shifted perspective than objective reality, but I’m not especially worried about fintech. At least, not today.
Elsewhere…My colleague Jason Del Rey has the exclusive this morning on Photon Health, a startup that’s looking to make waves in a space where many have drowned: the labyrinthine prescription drug market. The company recently raised a $9 million round, as it pursues a lofty goal—to make shopping for prescription drugs transparent and convenient, much in the way online shopping is today.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: [email protected]
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Nina Ajemian curated the deals section of today’s newsletter.
VENTURE DEALS
- Re:Build Manufacturing, a Framingham, Mass.-based industrial manufacturing company, raised $120 million in funding from General Catalyst.
- HistoSonics, a Plymouth, Minn.-based sonic beam therapy medical device company, raised $102 million in Series D funding. Alpha Wave Ventures led the round and was joined by Amzak Health, HealthQuest Capital, existing investors Johnson & Johnson Innovation, Venture Investors, Lumira Ventures, and others.
- EliseAI, a New York City-based AI platform for the housing industry, raised $75 million in Series D funding. Sapphire Ventures led the round and was joined by existing investors Point72 Private Investments, Divco West, Navitas Capital, and Koch Real Estate Investments.
- Sahara AI, a Los Angeles, Calif.-based decentralized AI blockchain platform, raised $37 million in funding. Pantera Capital, Binance Labs, Polychain Capital led the round and were joined by Samsung NEXT, Matrix Partners, dao5, Geekcartel, and others.
- CruxOCM, a Calgary, Canada-based technology for control room operators technology company, raised $17 million in Series A funding. M12 led the round and was joined by ONEOK, Raven Indigenous Capital Partners, EIC Rose Rock Fund, existing investors Angular Ventures, Bullpen Capital, Root Ventures, and others.
- Sling Money, an Amsterdam, Netherlands-based money transfer app, raised $15 million in Series A funding led by Union Square Ventures, Ribbit Capital, and Slow Ventures.
- MD Ally, a New York City-based 911 diversion, care, and navigation solutions provider, raised $14 million in Series A funding. Frist Cressey Ventures led the round and was joined by Techstars, Seae Ventures, Red & Blue Ventures, and Alumni Ventures.
- Eschatology Entertainment, a Nicosia, Cyprus-based game development studio, raised $11.3 million in Series A funding. KRAFTON led the round and was joined by GEM Capital and The Games Fund.
- Levels, a New York City-based food and health software company, raised $10 million in a Series A extension from Long Journey, a16z, and others.
- Parfin, a London, England-based digital assets infrastructure company, raised $10 million in Series A funding. ParaFi Capital led the round and was joined by Framework Ventures, L4 Venture Builder, and Núclea.
- Rhinestone, a London, England-based infrastructure developer for modular smart accounts, raised $5 million in seed funding. 1kx led the round and was joined by CoinFund, Lattice, Heartcore, and others.
- definity, a Chicago, Ill.-based data monitoring platform raised $4.5 million in seed funding. StageOne Ventures led the round and was joined by Hyde Park Venture Partners and angel investors.
- Guardoc Health, a Tel Aviv, Israel-based AI platform for nurses, raised $3 million in seed funding. Pitango led the round and was joined by Bertelsmann Investments, Springbank, and Fresh.fund.
PRIVATE EQUITY
- Blackstone agreed to acquire a majority stake in Chartis, a Chicago, Ill.-based healthcare advisory firm. Financial terms were not disclosed.
- Enlightenment Capital acquired a majority stake in Cryptic Vector, a Cincinnati, Ohio-based offensive cyber solutions provider. Financial terms were not disclosed.
- Everfox, backed by TPG, acquired Garrison Technology, a London, U.K.-based cybersecurity company. Financial terms were not disclosed.
- EQT acquired WSO2, a Santa Clara, Calif.-based digital transformation technologies provider. Financial terms were not disclosed.
- Fort Point Capital acquired NewBold Corporation, a Greenville, S.C.-based managed technology services provider for the quick service restaurant, retail, warehousing, and healthcare industries. Financial terms were not disclosed.
- Gauge Capital agreed to recapitalize AGT Robotics, a Trois-Rivières, Canada-based robotic welding solutions provider for the structural steel and heavy metal fabrication industry. Financial terms were not disclosed.
- Mimecast, backed by Permira, acquired Aware, a Columbus, Ohio-based AI collaboration security platform. Financial terms were not disclosed.
- mrge, backed by Waterland Private Equity, acquired MaxBounty, an Ottawa, Canada-based performance marketing network. Financial terms were not disclosed.
- New State Capital acquired the rotating equipment segment from Universal Plant Services, a Houston, Texas-based rotating and reciprocating equipment services company. Financial terms were not disclosed.
- RESA Power, backed by Investcorp, acquired Power Technical Services, a Downers Grove, Ill.-based electrical testing company. Financial terms were not disclosed.
EXITS
- DigiCert, backed by Clearlake Capital Group, Crosspoint Capital Partners, and TA Associates Management, agreed to acquire Vercara, a Herndon, Va.-based cloud-based security platform, from Golden Gate Capital and GIC. Financial terms were not disclosed.
OTHER
- CVC agreed to acquire an approximately 50% ownership stake in Epicor, an Austin, Texas-based industry-specific enterprise software. Financial terms were not disclosed.
- IXL Learning acquired Carson Dellosa Education, a Greensboro, N.C.-based publisher of K-9 teaching supplies for educators and families. Financial terms were not disclosed.
- Mars agreed to acquire Kellanova, a Chicago, Ill.-based food and beverage manufacturer, for $35.9 billion.
- Hugging Face acquired XetHub, a Seattle, Wash.-based software development company. Financial terms were not disclosed.
- Trove acquired Recurate, a Washington, D.C.-based resale platform. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Resurgens Technology Partners, an Atlanta, Ga.-based private equity firm, raised $800 million for its third fund focused on application and IT infrastructure software.
