Fintech startups need to move faster
Fintech was used the last few years to easy and fast VC money. In Europe alone, boosted by pandemic, 2021-22, more than $50bil were invested, with the largest chunk being in deals over $100mio. From digital challenger banks, to open banking scaleups, to payments tycoons, we saw valuations reaching 90bil in just a few years.
Since the war started and a financial crisis emerged in Europe mainly, the figures dropped dramatically. In 2023 in Europe, fintech investment barely reached the $3bil and does not look good for the rest of the year. Looks like fintech is not so hot anymore for investors.
Of course this is not accurate. The 3x increase in the last 2 years investments versus the previous 2 years (2018-19 investment were close to $20bil), was an exaggeration due mainly to the boost of the pandemic to payments sector. The market will balance again and it looks that a safe prediction for 2023-24 is that around overall $18-20bil will still be invested in amazing RPA, AI and big data applications, further reg-tech, A2A payments, embedded fintech and so many other amazing fintech applications.
The difference with the past is that now, fewer startups will make it to VCs and even fewer will get the monies. Promises, visionary plans and key words will not be enough for founders to convince investors. They will need Proof of concept and traction, two key indicators that we forgot due to the urgency that pandemic has brought.
For start-ups in pre-seed or seed rounds, reaching traction point will need to be an urgent matter. The longer a startup stays in developing, the lower probability for the founder to get the money…somebody else will in the meantime, from the smaller investors bucket.
“Grow with your customer” is a back weighted program, where start-up pays 10% of the agreed budget upfront, 15% on delivery of MVP and all the rest 75% in monthly installments, which may differ according to the achievement of pre-agreed KPIs linked to startup performance. IP stays with FUND4ALL until the budget is fully paid.
Using our tools the founders can run faster to the MVP stage, with minimum expense and claim VC money for their growth.