Global fintech funding hit $131.5 billion last year, leagues ahead of 2020’s $49 billion, according to CB Insights data released Wednesday. The capital raising boom has given Fintechs tons of cash for acquisitions and to extend their services.
Insider.com reported about a panel hosted by FT Partners on January 6 that noted how several VCs said “mid-sized fintechs are expected to start gobbling up each other this year instead of getting bought out by bigger players.”
Several recent deals were mentioned by Insider.com as examples:
- Fractal, an AI and analytics fintech, announced plans to acquire Neal Analytics, a cloud- and data-focused firm, on January 11, a week after the former raised $360 million.
- Sift, a fraud-prevention startup, acquired biometrics firm Keyless in November after adding $25 million to its $50 million Series E in April.
- Digital bank MoneyLion has a pending acquisition of Even Financial, a fintech that builds APIs, in addition to its $75 million deal for digital-media firm MALKA.
Insider.com reported on the strategic shift occurring in the world of fintech. The report said “technology companies that cut their teeth specializing in one aspect of finance — be it lending, personal finance, or buy now, pay later — have begun expanding into other banking functions with the goal of becoming a one-stop-shop or “super fintech.”
S&P Global Market Intelligence’s January 10 research paper said, “there’s a mass of fintechs flush with cash from a year of easy funding. They now have the capital to buy up other fintechs to expand and become a one-stop-shop.”
“Capital in 2022 is going to be also very strategic: who can get it, who can get it quickly, who can deploy it,” Steve McLaughlin, founder, CEO, and managing partner at FT Partners, said of fintechs’ spending strategies,” reported Insider.