Fintech Sector Investment Remains Muted While Opportunity Persists in 2024; Silicon Valley Bank Releases Fourth Edition of Future of Fintech Report
Silicon Valley Bank's 2024 Future of Fintech Report reveals a significant slowdown in fintech investment, with VC fundraising dropping 91% since 2021 peak. Despite challenges, nearly 80% of fintech companies improved EBITDA margins year-over-year. The sector shows signs of adaptation with AI emerging as a bright spot, particularly in customer service and productivity applications. Investment patterns have shifted towards early-stage deals, with seed rounds outnumbering Series A by 3:1. AI-native fintech companies are showing stronger value creation, with a median 4.0x return versus 2.7x for legacy companies in 2024 VC deals.
Il rapporto 2024 sul futuro della fintech della Silicon Valley Bank rivela un significativo rallentamento degli investimenti nella fintech, con un calo del 91% nel fundraising da VC rispetto al picco del 2021. Nonostante le difficoltà, quasi l'80% delle aziende fintech ha migliorato i margini EBITDA rispetto all'anno precedente. Il settore mostra segni di adattamento, con l'IA che emerge come un punto luminoso, in particolare nelle applicazioni per il servizio clienti e la produttività. I modelli di investimento si sono spostati verso operazioni in fase iniziale, con i round seed che superano il Series A di 3 a 1. Le aziende fintech native in IA mostrano una creazione di valore più forte, con un ritorno mediano di 4.0x rispetto a 2.7x per le aziende legacy negli affari VC del 2024.
El informe de Silicon Valley Bank sobre el futuro de fintech en 2024 revela una desaceleración significativa en la inversión en fintech, con una caída del 91% en la recaudación de VC desde el pico de 2021. A pesar de los desafíos, casi el 80% de las empresas fintech mejoraron sus márgenes EBITDA interanualmente. El sector muestra señales de adaptación, con la IA emergiendo como un punto brillante, particularmente en aplicaciones de atención al cliente y productividad. Los patrones de inversión se han desplazado hacia acuerdos de etapa inicial, con rondas seed que superan a las Series A en una proporción de 3 a 1. Las empresas fintech nativas de IA están mostrando una creación de valor más fuerte, con un retorno mediano de 4.0x frente a 2.7x para las empresas tradicionales en los acuerdos de VC de 2024.
실리콘밸리 은행의 2024년 핀테크 미래 보고서는 핀테크 투자에서 상당한 둔화를 보여주며, 2021년 정점 이후 벤처 캐피탈 모금이 91% 감소했습니다. 어려움에도 불구하고 거의 80%의 핀테크 기업이 연도별 EBITDA 마진을 개선했습니다. 이 분야는 고객 서비스와 생산성 애플리케이션에서 AI가 밝은 점으로 떠오르며 적응의 징후를 보이고 있습니다. 투자 패턴은 초기 단계의 거래로 전환되었으며, 시드 라운드가 시리즈 A를 3:1로 초과하고 있습니다. AI 기반 핀테크 기업은 더 강력한 가치 창출을 보여주며, 2024년 VC 거래에서 전통 기업의 2.7배에 비해 중간 4.0배의 수익률을 기록하고 있습니다.
Le rapport 2024 de Silicon Valley Bank sur l'avenir de la fintech révèle un ralentissement significatif des investissements dans la fintech, avec une baisse de 91 % du financement par capital-risque depuis le pic de 2021. Malgré les défis, près de 80 % des entreprises fintech ont amélioré leurs marges EBITDA d'une année sur l'autre. Le secteur montre des signes d'adaptation, avec l'IA qui émerge comme un point lumineux, notamment dans le service client et les applications de productivité. Les modèles d'investissement se sont déplacés vers les transactions en phase précoce, les tours de semences dépassant les séries A dans un rapport de 3:1. Les entreprises fintech basées sur l'IA montrent une création de valeur plus forte, avec un rendement médian de 4,0x contre 2,7x pour les entreprises traditionnelles dans les deals VC de 2024.
Der Zukunftsbericht 2024 der Silicon Valley Bank über Fintech zeigt einen signifikanten Rückgang der Fintech-Investitionen, wobei das VC-Fundraising seit dem Höhepunkt 2021 um 91 % gesunken ist. Trotz der Herausforderungen haben fast 80 % der Fintech-Unternehmen ihre EBITDA-Margen im Jahresvergleich verbessert. Der Sektor zeigt Anzeichen der Anpassung, wobei KI als positiver Aspekt auftaucht, insbesondere in den Bereichen Kundenservice und Produktivitätsanwendungen. Die Investitionsmuster haben sich in Richtung Frühphasen-Geschäfte verschoben, wobei Seed-Runden die Series A im Verhältnis 3:1 übertreffen. KI-nativen Fintech-Unternehmen zeigen eine stärkere Wertschöpfung, mit einer medianen Rendite von 4,0x gegenüber 2,7x für traditionelle Unternehmen bei VC-Deals 2024.
- 80% of fintech companies improved EBITDA margins year-over-year
- 30% of companies now have 6-12 months runway, up from 20% last year
- AI-native fintech companies showing 4.0x median value creation vs 2.7x for legacy companies
- Fintech VC fundraising dropped 91% since 2021 peak
- Fintech's share of VC dollars decreased from 1/5 in 2021 to 1/12 in 2024
- Large deals ($100M+) dropped from 65% to 34% of sector activity
- VC investment pace decreased from 2+ deals/month to less than 1 deal/month
Insights
The fintech sector is experiencing a significant contraction, with venture capital investment down
- Early-stage dominance with 3:1 ratio of seed to Series A deals
- Reduced mega-deals, with
100M+ deals dropping from65% to34% of activity - Top 100 VC firms slowing from 2+ monthly deals to less than 1
However, underlying business metrics show resilience -
2024 report highlights Fintech founders diligently improving bottom line in 2024 despite investments dropping
The 2024 Future of Fintech Report provides a detailed analysis of the fintech market, including investment and fundraising trends. It also looks at the growing importance of AI in horizontal applications, including customer service and productivity, as well as vertical applications specific to finance.
"While fintech companies face challenges, we anticipate broader recovery in investment to begin in 2025 as we continue to see opportunities for the industry," stated Nick Christian, Head of National Fintech and Specialty Finance at Silicon Valley Bank. "For example, US fintech companies are becoming more efficient with nearly
Additional findings from the Future of Fintech 2024 report include:
Fintech Investment Key Data Points
- Fintech-inclined VC fundraising dropped
91% since its peak in 2021, with funds raising$5B $9B - One in twelve VC dollars went to a fintech company in 2024, down from one in
five dollars in 2021. - VC firms have slowed their pace of deployments in fintech. In 2021, the most active 100 US fintech investors were closing more than two deals per month. That pace has dropped to less than one deal per month this year.
- In 2021, fintech deals over
$100M 65% of deal activity in the sector. In 2024 this number has dropped to34% .
AI Investment by the Numbers
- Since 2021, mentions of AI in fintech corporate earnings calls have increased 4x.
- AI-native fintech companies are experiencing an advantage in incorporating AI tools into early stage products while legacy fintechs are largely cutting human capital costs in order to embrace AI.
- Native AI companies in fintech create more value per dollar invested than Legacy/first-generation fintechs (i.e., median for 2024 VC deals was 4.0x for Native AI versus 2.7x for Legacy/First Generation AI).
Learn More
To read the complete Future of Fintech 2024 report, click here: The Future of Fintech Report 2024 | Silicon Valley Bank (svb.com)
A leader in providing market insights about the innovation economy, SVB has produced more than 10 new market reports in 2024. For the complete library of SVB's signature reports, please visit Market Research Industry Trends & Insights | Silicon Valley Bank (svb.com)
About Silicon Valley Bank
Silicon Valley Bank (SVB), a division of First Citizens Bank, is the bank of some of the world's most innovative companies and investors. SVB provides commercial and private banking to individuals and companies in the technology, life science and healthcare, private equity, venture capital and premium wine industries. SVB operates in centers of innovation throughout
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SOURCE Silicon Valley Bank
FAQ
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