Levels of investment and number of deals in the fintech industry fell in 2022 compared to 2021. As interest rates have steadily climbed, companies across the sector, particularly startups, have begun to struggle. The early signs in 2023 suggest that this trend is potentially continuing.
Despite an overall fall in investment in 2022, the results did not spell catastrophe – as levels remained at a good level. Total fintech investment fell to $92billion in 2022, a fall of 30 per cent from the total of $130billion reached in 2021. Could this trend continue in 2023?
Despite the news, some regions saw higher levels of investment. Singapore saw an increase of 41 per cent in 2022 compared to 2021. The US and the UK remained the top two countries receiving the highest level of investment in 2022 despite both experiencing downturns in investment.
News emerging at the beginning of 2023 suggests that the sector may not see a resurgence to 2021 levels. Instead, for most regions across the globe, this year may represent a period of consolidation rather than growth.
What are the early signs for 2023?
Research by FinTech Global suggests that only 14 fintech deals were completed across the first week of 2023. Some of the biggest investments and funding rounds at the start of the year included:
Akulaku – Indonesia – $200million
The largest deal concluded coming into 2023 was a $200million investment into the banking and digital finance platform Akulaku. The investment came from one of Japan’s largest banks: Mitsubishi UFJ Financial Group (MUFG).
As part of the agreement, Akulaku is to work alongside MUFG companies in Southeast Asia. As part of MUFG’s strategic investment, Akulaku has agreed to work with MUFG companies in the Southeast Asian region as both look to expand into new markets.
SirionLabs – United States – $110million
Contract lifecycle management (CLM) startup SIrionLabs raised an additional $25million to conclude a total $110million Series D funding round.
The recent funding boost came from private equity firm Brookfield Growth. SirionLabs aims to use the investment to enhance product innovation and advance both its AI capabilities and its ability to integrate with enterprise platforms such as Microsoft 365.
KreditBee – India – $100million
The personal loan and online credit platform in India KreditBee extended its Series D round. It raised an additional $100million in primary funding from Advent International.
The additional capital raised will be used for scaling the existing business and diversifying its product offering by venturing into digitally enabled financial products.
Money View – India – $75million
India’s second largest investment went to the online credit platform Money View. The Series E funding round led by Apis Partners, saw investment from the likes of Tiger Global, Winter Capital and Evolvence.
Money View plans to use the funding to scale its credit business, increase the size of its workforce and expand its product portfolio to include services such as digital bank accounts, insurance and wealth management solutions.
Grapple – Australia – $35million
Business funding provider from Australia, Grapple, received $35million from financier Global Credit Investments. The funding provider will use the new access to capital to continue its growth during a period of financial difficulty for the sector.
SarvaGram – India – $35million
The third India-based company on the list is financial and lending product provider for rural areas in India, SarvaGram. The provider raised $35million in its latest Series C investment round.
The company explained that the investment can increase its number of outlets to 125 by 2024. SarvaGram also hopes to improve its tech and data analytics capabilities.
