According to CB Insights, more than 20% of venture capital funds poured into fintech businesses globally last year. Fintech businesses accounted for one-third of all unicorns established in 2021.
According to the 2021 Matrix Fintech Index, public fintech businesses outpaced the market by 3x, owing to favourable IPO debuts, SPACs, and growing usage of digital payments and e-commerce, particularly BNPL.
According to Crunchbase, VCs backed private fintech businesses to the tune of $134 billion in the final accounting. Even though those companies suffered a 30% drop in the last months of the year, investors are actively looking for new opportunities.
This is an excellent time to establish a fintech company, but which firm should you pitch to if you’re a Latin American early-stage embedded finance firm? If you’re a later-stage B2B payments startup in the United States, who should you contact? We interviewed ten active investors over the last several weeks to give TechCrunch+ readers particular insight about what fintech investors are looking for right now and what you should know before approaching them.
Crypto was mentioned several times, and LatAm is hot, hot, hot when it comes to investor interest. Each response was gracious enough to disclose how they preferred to be pitched, and one even offered an example of a chilly e-mail for laughs.
Fintech businesses received a large amount of venture capital funding in 2021. What differences did you notice in the landscape as a company that has been investing in the industry for some time? Was there a lot more competition in the deals?
Fintech can be viewed in two ways: a restricted view of the field as a set of financial services offered via technology, and a far larger view of the area as a new business model for any online company. The latter opportunity is ten times larger than the former, and the infrastructure that underpins it might result in some of the largest yet-to-be-built fintech enterprises. We’re merely getting started.
Because the area is still technical, entrepreneurs can get more value from their experience and knowledge, and many generalist investing patterns may not hold true. Exponential growth of consumer products, for example, is virtually always a cause to invest, with the exception of consumer lending, where giving money out always has a product-market fit and growth is less important than the ability to repay. As a result, investors with true competence, rather than those suffering from fintech FOMO, have a better chance of picking and winning more of the correct businesses. I believe that goods are becoming the fundamentals of financial services and that traditional financial products (banking, lending, insurance, and payments) may now be integrated with a single line of code.
