Global Fintech Funding Hits 7-Year Low in 2024 Amid Market Challenges

The year 2024 was again not an easy one for fintech companies: According to a study by CB Insights, global fintech funding fell to 33.7 billion euros, the lowest level in the last seven years. However, the volume of financing rounds rose to an average of four million US dollars.

Last year, global fintech funding fell again

According to KPMG, high interest rates and geopolitical uncertainty were the main reasons for the collapse in fintech funding in the first half of 2024. Nevertheless, we observed a total of 41 financing rounds last year, 29 of which were in the first half of the year and twelve in the second half of the year. The most fintech funding rounds took place in April, when nine fintech companies received money from investors. We were unable to identify a single deal for September.

SumUp received its largest funding in May 2024. The POS system provider raised a total of 1.5 billion euros from well-known investors, including Goldman Sachs, Deutsche Bank and Blackrock. The money was used to refinance existing debt and global growth.

Iwoca, Solaris and Pliant also received large sums. Iwoca received 175 million euros from Citibank and Insight Investments to finance loans for German small and medium-sized companies. Solaris received 96 million euros in March and an additional financial guarantee of 100 million euros.

The funds were intended to secure the ADAC credit card program. However, the deal was accompanied by a sharp devaluation. The credit card platform Pliant even received money twice: in January 33 million euros as a capital increase and a loan of 100 million euros, and in April a further 18 million euros were added.

Fintech funding in Germany

In total, the fintech comapnies listed raised 2.72 billion euros last year. The average is 11.8 million euros. This total does not include three fintech comapnies whose funding amount is unknown. Slight deviations also arise from the conversion from US dollars to euros.

Investors put the most money into payment start-ups: nine fintech companies in this area received over 1.7 billion euros, with the Sumup mega round also making up the largest part here.

The second largest fintech funding volume was in the area of ​​API banking, where Pliant and Solaris received a total of 347 million euros in three financing rounds. The second most deals were for providers of trading, investing and crypto, where six fintechs received a total of 32.6 million euros. In the credit sector, there were five financing rounds with a total volume of 219.6 million euros.

Fintech funding, exits and bankruptices

We were able to identify seven exits in total. The sale of Creditshelf to Swiss competitor Teylor in April attracted particular attention. According to the company, the takeover made Teylor the market leader for loans for small and medium-sized companies. The sale saved Creditshelf, which had entered into protective shield proceedings in February after refinancing difficulties. The payment service provider Jitpay was insolvent when Volksbank Brawo took over 100 percent of the shares. Pile Capital, on the other hand, was sold to Vivid just two years after it was founded.

Two fintech companies were bought back by their founders. In July, René Maudrich and Benjamin Kirschner bought back all shares in the accounting start-up Fastbill, which they founded. They had sold the fintech to the Canadian company Freshbooks in 2021. The founders of Ride Capital also bought back their start-up.

We also observed eight bankruptcies last year. The first half of the year saw the bankruptcies of ExpressSteuer, Dock Financial and Mobyfin, the renamed fintech subsidiary of Auto 1. In July, Clink went bankrupt. Brygge, which offered open banking for the elderly, initially tried to save itself by becoming a non-profit. When its application was rejected, Brygge disappeared from the market. Oneclimate had to say goodbye in September because Viessmann stopped financing. Enfore also went bankrupt in September.

__

(Featured image by Makeshkumar Painam via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Payment & Banking. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us