Fintech funding saw a sharp rebound during the second quarter worldwide, raising the most money in Q2 since 2022. 

During the quarter, fintechs raised $44.3 billion, up 78% year over year, while M&A reported the best quarter in the past four years with deals totaling $24.9 billion, nearly double in the same period, according to KPMG’s Pulse of Fintech report, published this month.

AI has become a major funding driver within the fintech sector despite questions about its viability, the report stated.  

PayRewards bags $28M  

PayRewards, a B2B payments and rewards platform for small businesses, raised $28 million in a series E round as it launched in the United States, according to an Aug. 24 release.  

PayRewards, a subsidiary of Australia-based Pay.com.au, will use some of the money to hire more AI experts, invest in more AI vendors and increase Claude token budgets for its engineers, Chief Executive Blake Hutchison told FinAi News.  

Internally, PayRewards uses AI to review payments, organize payment types, categorize sales leads and provide performance feedback to sales reps, Hutchison said.  

PayRewards plans to deploy customer-facing AI to generate insights into potential rewards points and what they can be redeemed for, he said. The company also is building an AI voice agent to help businesses track real-time updates on loyalty programs. 

For example, “Southwest might change the name of its rewards program and how seats get redeemed,” he said. The platform is “basically a knowledge base that you can query at any time to get a real-time read of the loyalty industry and how you can better maximize your spend.” 

Pinegap raises $8M in series A round 

AI-powered equity research platform Pinegap raised $8 million in series A funding, the fintech announced Aug. 5. 

The round was led by Stellaris Venture Partners with participation from Inventus, Silicon Valley Quad and DeVC, according to the release. 

The funding is “going to be an even split between product and [go-to-market],” Ankit Varmani, Pinegap’s co- founder, told FinAi News. “We are aggressively hiring across all aspects of the business.” 

The money will support Pinegap’s efforts to build custom AI agents for institutions investors, according to the release. 

“Customization comes down to configuration, not self-learning,” Varmani said. “We’ve built internal tooling that lets us rapidly deploy and tune agents to a fund’s specific style, sector focus and workflow, so the heavy lifting happens on our end rather than the model teaching itself from a client’s data.”  

Pinegap has raised $10.5 million in funding since its inception in 2023, according to Crunchbase. 

Finster raises undisclosed amount  

Finster, an AI tools service provider for financial professionals, raised an undisclosed amount from UBS Investment Banking and financial data company FactSet, according to a recent Finster release. 

It’s more than an investment, Charles Poliacof, chief commercial officer, told FinAi News.“Our FactSet partnership gives us access to all of their data through MCPs and APIs,” Poliacof said. “Working with UBS helps us understand what it is that moves a needle inside a Tier One global investment bank.” 

The company is shaping its tools to be deployed within the financial services industry better by gaining a deeper understanding of processes and workflows, he said. 

The funds raised will be used to improve its AI-agnostic platform, Poliacof said, adding that investment banking and wealth management are focuses for Finster. 

Register here for the FinAi Lending Summit, set for Oct. 7-8 in Las Vegas. This inaugural event will include speakers from Fifth Third and Capital One as well as a fireside chat with Piermont Bank founder and Chief Executive Wendy Cai-Lee.