Hike funding

Report: US FinTech Venture Capital Funding Has Doubled

Venture capital funding for US FinTechs almost doubled in value and volume of transactions, according to an analysis published Thursday, February 10 by S&P Global Market Intelligence.

The company says the rise in deal value has been particularly surprising, but warns that 2022 could be a different story.

“U.S. FinTech funding had a banner year in 2021, but it will be a tough act to track,” the report said. “Falling public equity market valuations and potential interest rate hikes do not bode well for future investment activity.

“Private capital remained plentiful in January 2022, based on the aggregate total of all U.S. industries, but we’ll be watching for signs of a slowdown. The overall value of venture capital funding for U.S. fintech companies has soared in 2021, led by startups focused on investment and capital markets technology,” according to the report.

Among the key findings of the S&P Global Market Intelligence report:

  • The surge in FinTech funding in 2021 was not only due to favorable year-over-year comparisons after a slowdown in activity in 2020 due to the COVID-19 pandemic. The total amount raised increased by more than 95% in the fourth quarter of 2021 compared to 2020, and the volume of transactions jumped by more than 40% during this period.
  • Investment and financial markets technology firms were the main beneficiaries of the increase in venture capital investments in 2021, to around $9 billion, according to S&P estimates, not including the capital injection of 3 $.4 billion from Robinhood Markets Inc. in February 2021.
  • According to the report, investment and capital markets technology firms completed nearly 250 funding rounds in 2021, about 33% more than the second-highest category. They accounted for 26% of total FinTech fundraising during the year.
  • There are worrying signs ahead for FinTech in 2022, but it’s still early in the year and that could change.

Related: UK FinTechs felt the love in 2021 with $37.3 billion in funding

Meanwhile, a semi-annual report from KPMG shows UK FinTechs were buoyed by $37.3 billion in funding in 2021, up 617% from 2020.

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