Crunchbase Data: Fintech IPOs Reignite Investor Optimism, But Funding Still Trails 2021 Highs

Mary Ann Azevedo

Global venture funding to fintech startups nudged up in the first half of 2025 to its highest levels in several quarters but remains far below its post-pandemic highs, Crunchbase data shows.

Total global funding to VC-backed financial technology startups totaled $22 billion in H1, per Crunchbase data. That's an 11.1% increase from the second half of 2024, and up 5.3% compared to the $20.9 billion raised in the first half of last year.

Despite the modest gains, the H1 amount is the most raised by fintech startups in the past few comparable timelines. In the first half of 2023, they raised a collective $27 billion.

For context, the numbers are still significantly lower than the peak of $68.7 billion raised in the first half of 2021.

They're also still lower than even pre-pandemic sums. Fintech startups raised a combined $40.3 billion in the first half of 2018, $25.4 billion in H1 2019, and $26.3 billion in the first half of 2020.

Deal flow, however, was down significantly — signaling fewer, but larger rounds. The first half of 2025 saw 1,805 deals consummated, a 31.4% decline from the more than 2,633 completed in H1 2024 and down slightly — by 10.2% — from the more than 2,000 announced in H2 2024.

IPO breakthrough

One thing that could work in fintech's favor in the short term is that the IPO dam finally seems to have broken in 2025.

Global Financial Services Companies Likely to IPO

Since the beginning of the year, several companies in the fintech space have either gone public or filed to do so. They include stablecoin issuer Circle, which went public in June and saw its share price more than double in their New York Stock Exchange debut, and digital bank Chime, which also went public that month and closed up around 37% in its first day of trading.

Other fintech-related companies that have either gone public or signaled plans to do so this year include Swedish buy now, pay later giant Klarna, digital wealth management startup Wealthfront, crypto exchange Gemini, and expense management firm Navan (formerly TripActions).

A robust IPO pipeline matters for the private market since startup funding often follows the lead of public counterparts. If a number of fintech companies have impressive debuts on the public exchanges, that can only bode well for the private market.

Active investors and bigger deals

To get insight into who's funding all these fintech startups, Crunchbase took a look at the most active investors in the space.

Alexandria, Virginia-based QED Investors took the top spot for leading or co-leading rounds of more than $5 million into fintech companies in the first half of 2025. The firm’s exclusive focus is fintech investing.

Other active investors in the space include Sequoia Capital, Hack VC, Accel and Polychain.

As mentioned earlier, the fact that the sector experienced an increase in funding despite a lower deal count indicates that the first half of 2025 saw a number of large rounds.

All told, there were more than three dozen deals totaling $100 million or more that took place in the fintech space in the first half of 2025, Crunchbase data shows. Crypto exchange Binance raised the most money by far — a $2 billion venture round led by MGX in mid-March. Other large deals include infrastructure platform Plaid's $575 million raise in early April; U.K. payments platform Rapyd's $500 million haul in mid-March; HR and payroll startup Rippling's $450 million Series G in May; and online banking startup Mercury's $300 million Series C round in late March.

Speaking of large rounds, the investors that led or co-led rounds greater than $230 million differed some from the list above. MGX took the top spot, with Sequoia, Franklin Templeton, Paradigm and Founders Fund rounding out the top five.

‘A real sense of momentum returning’

QED Investors partner Camila Vieira said her firm is "cautiously optimistic" that fintech is on its way to making a comeback.

"There's a real sense of momentum returning, particularly in B2B infrastructure, AI-native fintech and climate-aligned financial services," she told Crunchbase News. "The market feels more grounded, and founders are building with stronger fundamentals from the outset."

QED's investment pace has remained steady, but with one notable difference. It's become "even more selective," Vieira said, "focusing on higher-quality opportunities, especially at the Series A and B stages."

She added: "We're spending more time with companies that show real traction, capital efficiency and readiness to scale, even in today's tighter environment."

QED remains cautious on consumer-facing fintechs "that lack a clear wedge," particularly mono-product neobanks or lenders "overly reliant on paid acquisition and margin-based competition."

"The bar for differentiation is significantly higher today," said Vieira. "That said, we continue to see exciting consumer models where companies own distribution or have access to proprietary data."

AI spurring fintech ‘super cycle’

Neil Kapur, partner at Atlanta-based TTV Capital, acknowledges that "some dollars have moved away from fintech."

Still, the firm is trying to not let the noise impact the positive signals it’s seeing in the sector.

"We know that in the short term the market will produce some volatility around potential investments; but on a longer time horizon, we see significant opportunity in financial services broadly," he told Crunchbase News. "In the past year, there has been a round of IPOs, M&A and consolidation — in some cases, producing positive outcomes for investors, and in others, enabling company survival."

Notably, many of the investments TTV made in the first half of 2025 are companies that were founded less than two years ago. In fact, its volume of newly closed investments in 2025 has increased by 3x vs. last year due to what the firm perceives as "an overall increase in both company quality and investment activity."

In Kapur's view, it's clear that AI has kicked off "a super cycle" and will be "transformational" as a new enabling technology.

"We all agree that AI will revolutionize the financial services industry; the big question is when," he said.

The firm also is bullish on consumer fintech despite some of the negative sentiment around the segment.

"We still see unending potential," Kapur said. "Just look at Revolut's latest numbers and the rumors surrounding their upcoming fundraise."

The firm is also seeing traction from non-AI-native companies in categories that may be overlooked by investors, but still operate in "massive revenue and profit pools" such as lending.

Sheel Mohnot, co-founder and general partner at Better Tomorrow Ventures, is resoundingly enthusiastic in his belief that fintech is in fact having a comeback year.

"It feels like every company that survived is doing incredibly well after suffering for a couple of years," he told Crunchbase News. "We never stepped off the gas because we have always believed in the sector."

Like many other investors, Mohnot believes that there is still a lot of opportunity where AI meets fintech.

"There are just so many things that AI can help solve," he said, noting that BTV continues to be excited about embedded fintech, particularly in the banking, payroll and accounting segments.

Mohnot is less bullish on stablecoins. While he concedes they can solve some problems "really well," he thinks "there are way too many people trying to solve things with stablecoins that probably won't be solved with stablecoins … like payments in the U.S."

IPOs, M&A and a higher bar for funding

Looking ahead, Mohnot predicts more generalist funds will be tip-toeing back into fintech after sitting out 2023 and 2024. He also expects we'll see even more companies going public in 2026, and continued consolidation "as some 2021‑era Series B startups sell or merge once post‑pandemic tailwinds fade."

He added: "I think we'll also see AI everywhere — not much distinction between an AI fintech and a fintech company."

Jeremy Jonker, co-founder and managing partner at Infinity Ventures, agrees there's definitely more energy in the market compared to the past couple of years.

"Rounds are getting aggressively preempted, M&A seems to be picking up, and IPO chatter is back," he said. "However, this rebound appears selective as the companies getting rewarded now tend to be the ones with strong fundamentals. The growth‑at‑all‑costs era has faded. … The bar remains very high."

For its part, Infinity Ventures is focused on areas where it believes startups are positioned to out-execute and take share from incumbents and later-stage companies. Agentic workflows in regulated industries are a good example, Jonker said.

"We're less interested in generic LLM wrappers that are relying solely on distribution or abstract use cases that never make it into real workflows," he said.

In general, Jonker believes that AI has become foundational in fintech, and not just a feature.

"We're seeing it used to automate dense, rules-based workflows in regulated industries, power agentic systems that can trigger actions without human input, and unlock new ways to serve customers with fewer resources," he told Crunchbase News. "The hype cycle is still noisy, but the real impact is happening where AI is embedded deep in the workflow, tied to proprietary data, and driving tangible productivity gains."

David Mort, general partner at Propel, believes that fintech is in fact already having a comeback year thanks to a few tailwinds including the impact of AI, the growing intersection between traditional financial services and cryptocurrencies, and the successful launches of products and services from companies established over a decade ago, including Coinbase, Robinhood, Revolut and Nubank.

"Excitement has returned to the fintech space, and we owe it to these three tailwinds," he told Crunchbase News.