Hey fintech friends,
Fintechs closed out 2024 with a total $28.62 billion in equity funding for the year– up from $28.58 billion in 2023– and companies show no signs of slowing down. Last quarter brought regulatory developments that could transform BNPL and earned wage access (EWA) solutions, an acceleration in traditional financial institutions’ adoption of tokenized assets & CBDCs, and a continued surge in AI innovations. We also saw the EU's landmark Markets in Crypto-Assets (MiCA) regulation take effect for crypto-asset platforms in Europe and, in the US, heightened debate around how BaaS models should be regulated following Synapse's collapse.
Against this backdrop, Q4 capped off an eventful year of funding breakthroughs, market shakeups, and evolving partnerships between fintech players and traditional banks. Let's dive into fintech activity in Q4 and the most significant trends shaping fintech going into 2025.
See the full Q4'24 data here (for paid subscribers only).
For new readers, Signals is the premium subscriber edition of TWIF designed to get you away from the headlines and to explore the larger trendlines. Each quarter, we break down four key questions on fintech activity:
Which concepts are getting funded?
Where are exits, M&A, and SPACs concentrated?
Which firms are raising debt and venture funds for fintech?
Which products were launched over the last quarter?
If you haven’t already, subscribe to future editions here!
Overall activity
Fintechs raised a total of $8.04 billion in Q4, up 29% from the prior quarter and up 12% Year-over-Year. The number of rounds raised was down 2% QoQ (⬆️3% YoY), and on average, equity raises grew in size by 24% in size QoQ (⬆️4% YoY).
See the full Q4'24 data here (for paid subscribers only).
Funding for growth-stage rounds (Series B - Series G) resurged in Q4, as three fintechs celebrated successful public exits: ServiceTitan IPO’d at a nearly $9 billion valuation, India’s MobiKwik went public at a $464 million valuation, and Japan’s Coincheck de-SPAC’d at an initial $1.25 billion valuation.
Other big fintechs are also gearing up to go public: Last quarter Chime and Klarna both filed to IPO sometime in 2025, eToro tapped Goldman Sachs to lead its public offering, and Circle’s founder doubled down on the company’s plans to go public this year (having filed for IPO in January 2024).
In private rounds, three fintechs reached unicorn status in Q4: TymeBank’s $250M Series D brought the South African banking platform to a $1.5 billion valuation; Moniepoint, the Nigerian business banking & payments giant, raised $110M in Series C funding at a +$1 billion valuation, and Flex, a rent payment platform, reportedly raised a $200M Series D at a $1.75 billion valuation.
See the full Q4‘24 data here (for paid subscribers only).
Which concepts are getting funded? 🤑
Areas that received the most funding were:
Consumer digital banking, led by Ualá’s $300M Series E (bringing the Argentinian digital bank’s valuation to $2.75 billion), Oneraising $300 million (ahead of its anticipated Walmart credit card launch in 2025), One Zero’s $100M raise, and Neo Financial’s C$110M Series D.
See the full Q4'24 data here (for paid subscribers only).
A few concepts received notable funding:
Stablecoin payments, with BVNK, WadzPay, Yellow Card, Patriot, Deblock, Brighty, KAST, Interlace, RD Technologies, Rise, Quine Co., Juicyway, Bleap, and ShieldPay raising a combined $210.7 million to accelerate global payments via stablecoins. Tether also invested in Dutch stablecoin issuer StablR (as it announced that Tether’s own European stablecoin, EURT, was not compliant with newly-adopted MiCA regulations and would be discontinued).
Business treasury management, with Agricap, Karpatkey, UnitPlus, Round Treasury, and Kyriba raising an aggregate $59.8 million to help businesses manage cash flow and earn yield on idle cash.
AI agents with autonomy to streamline…
Investment management, with Boosted.ai, Brightwave, and Auquan raising a total $34.5 million to transform investors’ portfolio insights. FINNY, Sightglass and Zeplyn collectively raised $7.3M in seed funding to supercharge advisors’ investor relations.
Customer support, with InterfaceAI closing a $30M Series A, Leap Financial raising $3.5M in seed capital, and Orin raising a pre-seed to enhance customer experiences for financial services providers.
Where is M&A concentrated? 📈
See the full Q4'24 data here (for paid subscribers only).
Areas that saw the highest M&A activity were:
Consumer digital banking, with Gen’s $1 billion acquisition ofMoneyLion, NewDay taking overSainsbury’s Argos credit card portfolio, Fiservacquiring payroll & employee banking provider Payfare, and the UK’s Pockitacquiring British neobank Monese.
Crypto payments, with Stripe’s $1.1 billion acquisition of stablecoin platform Bridge and MoonPay close to finalizing its acquisition of Web3 e-commerce platform Helio.
Regional banks continued to consolidate with Old National Bank’sacquisition ofBremer Bank and a merger betweenIndependent Bank and Enterprise Bancorp. Higher interest rates and souring commercial real estate portfolios are putting outsize economic pressure on regional banks, furthering a decline in the number of smaller financial institutions in the US.
Source: FDIC
Which firms are raising debt and venture funds for fintech? 💰
Venture firms raised a total of $16.5 billion to fund fintech and broader concepts. Notably:
General Catalystraised $8B for its seventh generalist early-stage fund.
Bain Capital Venturesraised $5.7B for its Global Special Situations Fund II.
Infinity Ventures closed its $184M Fund II to invest in global fintech & commerce startups.
Restive Ventures, an early-stage fintech-focused fund, filed to raise $70M for its third fund.
Rerail Fund, a fintech angel fund, closed $20M to invest in Pre-Seed and Seed-stage fintechs.
Swizzle Venturesclosed $5M for its inaugural fund targeting innovations in women’s health & wealth.
Which products were launched over the last quarter? 🚀
Finance is increasingly on-chain, with companies tokenizing real-world assets (RWAs) to streamline transactions across…
Banking- Visaunveiled a tokenization platform for banks to issue their own stablecoins; Citilaunched Token Services for Cash enabling businesses to make instant global transfers; DBSreleased blockchain-powered banking for institutions, and Dutch fintech Qashcame out of stealth with a stablecoin-based banking platform aimed at markets with currency volatility.
Payments- Stripe(re-)released support for crypto payment acceptance; Nuveilaunched stablecoin-based B2B payments in Latin America, and UBSpiloted Digital Cash to facilitate blockchain-based cross-border transfers.
Investment- The Prague Stock Exchangeimplemented decentralized trading under the EU's DLT pilot regime; JP Morgan's Kinexys (f.k.a. Onyx) platform unveiled support for EUR-USD FX trading; Goldman Sachsannounced the spin-out of its institutional trading blockchain, GS DAP, to an "industry-owned" tokenization platform; BBVAdebuted a tokenized fixed income fund in Spain, and Libeara & FundBridge partnered to launch tokenized T-Bills for trading.
AI-powered fraud detection tools abound, with Swift rolling out AI fraud detection to alert banks of suspicious activity; NVIDIA unveiling AI workflows for financial institutions to detect credit card fraud; Zenpli launching an AI-powered KYB platform, and Cleafy releasing an AI Co-Pilot to help financial institutions respond to security alerts. Meanwhile, Visa announced that its recently-released GenAI capabilities blocked 85% more fraud on Cyber Monday than it caught last year.
Q4'24 Roundup
Fintech is going on-chain
With all of the activity in cryptoassets, it’s perhaps no surprise that stablecoin usage surged 129% QoQ to a total $9.6 trillion in volume in Q4:
Source: Visa Onchain Analytics Dashboard
While a lot of the data on tokenized assets comes from public blockchains like Ethereum and Solana, financial institutions are aggressively ramping up transactions on their own internal blockchains. JP Morgan‘s Kinexys, for one, already supports over $2 billion in daily transaction volume, and Citi recently unveiled tokenized deposits on its private ledger.
If every bank is using a private ledger to speed up internal transactions, that’s all well and good, but if these blockchains don’t interconnect it almost seems like these banks used blockchain technology to… reinvent a fragmented banking system?
Acknowledging the need for a unified ledger, last quarter Goldman Sachs spun out its GS Digital Asset Platform as an “industry-owned” standalone business with the aim of making distributed ledger technology available across financial markets. The Prague Stock Exchange is also becoming the first European entity to implement decentralized settlement under the EU’s DLT pilot regime, enabling participants to instantly settle trades on-chain.
Looking ahead, cross-chain interoperability will play an increasingly important role in DeFi adoption. Some issuers (e.g. Circle) have solved for interoperability by issuing the same cryptoassets on different chains; others use bridge protocols to create “wrapped” versions of the asset on other chains. Still, it’s unclear how globally interoperable these solutions will be in the face of varying regional regulations (how DeFi providers maintain compliance if, say, a stablecoin issued in one country isn’t compatible with security, sanctions, or AML requirements in another?).
Consumer fintech regulation heats up
The regulatory spotlight is heating up on fintech banking apps: In the EU, financial institutions are scrambling to meet the implementation deadline for Digital Operational Resilience Act (DORA) provisions coming into force this month, as proposed PSD3 legislation and Payment Services Regulation, if adopted, could raise consumer protection and licensing requirements for European payment service providers (PSPs) by 2026.
In the UK, the FCA is looking to strengthen consumer protections for Buy Now, Pay Later users by bringing BNPL under the scope of the Consumer Credit Act– as across the pond, a coalition of BNPL providers sued the CFPB for issuing an interpretative rule that classifies Buy Now, Pay Later solutions as loans under Reg Z/TILA. The CFPB has also proposed rules that would classify Earned Wage Access solutions as loans, setting off a firestorm of comments from EWAs who (like BNPLs) argue that existing lending laws aren't adapted to these kinds of solutions.
US fintechs are eagerly waiting to see if fintech regulation softens during Trump's second term ( ...or if weaker federal oversight just emboldens state financial regulators to step up enforcement, as New York's Department of Financial Services has suggested they'll be more than happy to do).
