Total fintech funding and number of deals fell last year amid rising inflation and interest rates following a digitally transformative 2021 in the wake of the COVID-19 pandemic.

In 2022, fintech funding fell 46% year over year to $75.2 billion, according to CB Insights’ “2022 State of Fintech Report.” In the U.S., fintech funding plunged 50% YoY to $32 billion — and still remains the country’s second-highest funding year.

“2021 was a bombshell of year that resulted from digital transformation needs during the pandemic,” Anisha Kothapa, lead analyst of fintech at CB Insights, told Bank Automation News. “Given that and the unforeseen impact the pandemic had on the economy, it was expected that there would be a slight drop in 2022 compared to 2021.”

The report also found:

• Payments fintechs led in total funding deals in Q4 2022 at $3.4 billion;
• Banking fintechs accounted for $1.8 billion in funding in Q4 2022; and
• Wealth technology fintechs totaled $1.7 billion in funding in Q4 2022.

“Payments-focused fintechs led in funding and deals in recent years as businesses and consumers demanded for more seamless ways to make payments,” Kothapa said. “The pandemic helped accelerate digital payments as both businesses and consumers increased their use of contactless payment methods via online, mobile or in-person at the point of sale. The industry is becoming increasingly cashless and enabling financial inclusion and digital transformation.”

Fundraising for fintechs is already underway for 2023. The following fintechs recently secured funding:

Treasury Prime

Embedded banking fintech Treasury Prime raised $40 million is a series C funding round led by BAM Elevate, Banc Funds Company and Invicta.

The funding allows the San Francisco-based fintech to build out its network and enhance product development, according to a Treasury Prime release.

“This latest round of funding is affirmation that Treasury Prime is in an optimal position to capitalize on this market opportunity and confirmation that we’re delivering value to banks, enterprises and partners alike,” Chief Executive Chris Dean said in the release.

Treasury Prime raised $20 million in series B funding in 2021 in a round led by Deciens Capital and QED Investors, according to Crunchbase.

Foro

Commercial lending startup Foro raised $8 million in a series A funding round last week led by TTV Capital.

The Charolotte, N.C.-based company connects businesses and lenders based on capital needs and a business profile, cutting the discovery period to 7 days from 30 days, according to a Foro release.

“By using Foro, businesses can secure capital more efficiently and with more support than the current model, while lenders can access a pre-screened pool of businesses that already fit their lending parameters,” Foro Chief Executive Dave Godsman said in the release.

Fin Capital, Correlation Ventures and AME Cloud Ventures also participated in the funding round, according to Crunchbase.

Lulalend

Lending fintech Lulalend secured $35 million in series B funding Wednesday.

The South Africa-based fintech will use the capital to scale the business and meet the needs of small- and medium-sized businesses, according to a Lulalend release.

“We will scale our business and bring new products to market to better meet the financing needs of South Africa’s SMEs,” Lulalend Chief Executive Trever Gosling said.

London-based investment firm Lightrock led the funding round, according to Crunchbase.

Hawk:AI

Germany-based fraud prevention fintech Hawk:AI raised $17 million in series B funding last week led by Washington D.C.-based Sands Capital.

The funding will be used to excel the fintech’s AI, cloud outsourcing and fraud technology, Chief Executive Tobias Schweiger said in a release.

Hawk:AI has a total of $27 million in funding, according to Crunchbase.

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