Looking Forward in Fintech — 2024 Outlook

This post is by Dave Hafford from Writings from Thomvest Ventures – Medium

Looking Forward in Fintech — 2024 Outlook

With several landmark acquisitions, continued turbulence in the equity markets, and an uptick in funding, 2024 is off to an interesting start! Despite fintech’s recent ups and downs, the Thomvest team is approaching the market with fresh eyes and a strong sense of optimism. The prevailing economic climate, marked by sustained high interest and inflation rates into 2024, has nudged the fintech sector into a critical juncture, creating novel hurdles and headwinds, but at the same time, unique opportunities. While deal flow will likely continue, albeit at a slower pace than in 2021 or 2022, fintech companies face an array of concerns. Chief among these is an escalation in regulatory oversight and the advent of new disclosure mandates, necessitating increased attention from incumbents and disrupters alike. In a similar vein, the sector must fortify its commitments to data privacy and cybersecurity, adapting to a dynamically shifting threat environment. Nonetheless, on a macro-scale, with fintech holding a ~2% share of the $12.5T in global financial services revenue, the future still holds an abundance of untapped opportunities for venture investors, and Thomvest is excited to continue its efforts in supporting the next generation of fintech entrepreneurs.

2023 in Review

After the post-COVID explosion of activity in fintech, the sector is now experiencing a period of normalization. Pitchbook recorded $34.6B of fintech investment in 2023, representing a -43.8% YoY decline. This investment has been heavily biased towards B2B, which accounted for 72.1% of total fintech VC in 2023 compared to (Read more…)