Global funding for fintech ventures has reached its lowest point in seven years, experiencing a 16% decline between Q4 2023 and Q1 2024. This drop comes despite a reported 11% increase in venture funding across various industries.
CB Insights, an analytics firm, recently published its quarterly VC report, which highlighted the activity in Q1 2024. The report described the quarter as a “mixed bag for the venture market,” noting the continuous decline in equity deals over the past eight quarters as a negative factor. However, this decline was partially offset by several significant deals, including Amazon’s $4 billion investment in Anthropic AI.
According to the report, venture funding in Q1 2024 amounted to $58.4 billion, representing an 11% increase compared to Q4 2023’s $52.8 billion. While this indicates the potential for a rebound, the overall market remains down by 21% compared to Q1 2023 and 62% compared to Q1 2022.
The decline in funding is reflected in the number of new unicorns, with only 19 billion-dollar startups emerging in the quarter. This figure represents a 17% decrease from the previous quarter’s 23 unicorns.
In Q1 2024, the fintech sector did not perform as well as other VC sectors. The report reveals a 16% decline in funding between Q4 2023 and Q1 2024, bringing the current fintech venture market in line with the levels of 2017. This decline in the United States, the primary funding hub for fintech companies, coincided with increased scrutiny from the Federal Deposit Insurance Corporation (FDIC) regarding banking relationships with fintech companies.
On the other hand, Q1 2024 has witnessed remarkable highs for Bitcoin, as well as a record-breaking market cap of $2.9 trillion for all cryptocurrencies during the quarter. However, as of the time of this article’s publication, the market cap has decreased to $2.71 trillion in Q2.
This surge in the crypto market occurs in the final week and a half before the next Bitcoin halving. Some analysts predict a potential price increase of up to 160%, which would bring Bitcoin from its current value of around $70K to approximately $150K. However, other analysts consider the halving event as a “sell the news” occasion.