Tag: venture capital

  • Why fintech startups are raising more money in fewer deals

    Why fintech startups are raising more money in fewer deals

    In the first quarter of 2026, fintech startups raised more capital in fewer deals than the same period a year earlier. According to Crunchbase, fintech startups raised US$12 billion across 751 deals in the January to March period, marking a 5% annual increase in funding but 31.5% fewer deals.

    This shows investor preference for large, later-stage rounds and mature fintech startups, especially those claiming to have significant artificial intelligence (AI) capabilities. AI deals accounted for a whopping 80% of the US$300 billion in total global venture funding in the first quarter of the year. In line with that trend, fintech firms once known for their capabilities in payments, digital banking, or financial infrastructure have transformed into AI startups.

    The U.S. captured the lion’s share of deals and funding, accounting for 642 deals and a 50% share of total transactions, up from 458 deals and a 39% share a year earlier. That 40% rise in U.S. deal volume is notable and indicates an increasing concentration of fintech investment in the American market. At the same time, a number of U.S. fintech startups have become unicorns this year. 

    There have been more than 10 funding rounds for fintech startups thus far this year of more than $100 million. The biggest is digital savings platform Vestwell’s $385 million Series D, closely followed by fintech security firm Cloak’s $375 million Series B. Also notable: the $250 million Series C round of Rain, a stablecoin-focused payments infrastructure platform, Hong Kong-based digital bank WeLab’s $220 million Series D and Dubai-based Islamic bank Mal’s $230 million seed funding round.

    One of the top European fundraising rounds of the year so far involves the UK challenger bank Allica, which focuses on the UK SME market – chronically underbanked since the 2008-09 financial crisis. Allica Bank achieved unicorn status in February by securing $155 million in Series D funding, valuing the company at nearly $1.2 billion. It plans to use the funds to boost lending, enhance technology, and expand market share. 

    In contrast to the U.S. and Europe, Asia’s fintech funding has been less active in 2026. While Asia was once the hottest story in the fintech world, for several years now the region has been experiencing a funding slowdown. Investors in Asia’s fintech sector have become highly selective, favoring mature firms with clear paths to profitability rather than those focusing on rapid expansion. 

    The biggest markets in the region – China, India, and Indonesia – are characterized by varying rates of intense competition. While China and India offer established exit routes, Southeast Asia remains challenging due to fragmented regulatory environments and multiple currencies, making it harder for startups to build compelling growth stories for IPOs. 

    It is telling that the biggest Asian fintech funding round of the year is WeLab’s $220 million Series D. WeLab is the most successful of Hong Kong’s digital banks, having reached profitability last year and with a growing presence in both mainland China and Southeast Asia. The round attracted a wide range of investors, including Prudential Hong Kong, Fubon Bank (Hong Kong), Hong Kong Investment Corporation, TOM Group, Allianz X and HSBC.

    For investors, WeLab might not be a sure thing, but it is pretty close. The company has been a digital bank since 2020 and operating as a fintech provider since 2013.

    WeLab plans to use the massive capital injection to broaden its product ecosystem, invest in new business lines and pursue potential strategic M&A opportunities.

    Despite the general fintech funding slump in Asia, there were a few notable exceptions in the first quarter. Singapore remained a funding magnet, capturing 93% of total fintech investment in Southeast Asia for the quarter, including DayOne’s $2 billion Series C. Meanwhile, Japan’s PayPay completed a $10 billion IPO, one of the largest fintech exits of the quarter.

  • Why Stripe won’t commit to an IPO

    Why Stripe won’t commit to an IPO

    Stripe is one of the oldest fintech unicorns to remain a private company. Founded in 2010, Stripe is arguably past prime time to go public. Why the delay?

    It’s complicated. 

    With a valuation of $106.7 billion, the San Francisco and Dublin-headquartered company is one of the most successful payment startups of all time. Its seed round backers included Sequoia, Elon Musk and Peter Thiel – who all have records of making extraordinarily successful bets on nascent upstarts. 

    The company generated an estimated US$5.84 billion in revenue in 2025 and serves millions of businesses. It has expanded beyond payments to become a full-stack financial infrastructure platform. It has added services like subscription management, business setup, fraud prevention, lending and revenue/tax automation.  

    In 2024, Stripe reached profitability for the first time in a calendar year while total payment volume reached a massive US$1.4 trillion. In a Feb. 2025 news release, the company said that in each of the last six years, it had reinvested a higher proportion of its earnings in R&D “than any comparable company.” Cofounders Patrick and John Collison believe “this ability will prove particularly important in the coming years, as stablecoins, AI, and other forces reshape the landscape.”

    Unsurprisingly, Stripe is leaning into its AI capabilities as it seeks to capitalize on the massive expectations that investors and large corporations have for the technology. The payments firm emphasizes that it has invested in AI models “that are delivering significant revenue and performance uplifts for its users.” The payments company says that Hertz increased authorization rates by 4% when it moved its payments to Stripe, while Forbes saw a 23% boost in revenue with the payments startup managing its subscription payments. Carsharing marketplace Turo captured $114 million in additional annual revenue with Stripe’s Optimized Checkout Suite.


    While some startups would seek to use the momentum from AI-fueled growth to pave the way for an IPO, Stripe has shown no such inclination. Co-founders Patrick and John Collison have said that public companies are often suited for the “extract stage” rather than the “expand stage.” They say that staying private allows the company to focus on infrastructure building and long-term investments without the constant scrutiny and pressure to meet quarterly earnings per share (EPS) targets that come with being publicly traded. 

    At the same time, Stripe is profitable and cash-flow positive, so it does not need public market funding for capital. Unlike other fintech startups facing a financing squeeze, Stripe can finance its operations and acquisitions with existing cash and private funding rounds.

    Stripe also regularly arranges tender offers and secondary sales, allowing early investors and employees to sell their shares and get liquidity without the need for a public listing. This reduces a key incentive for an immediate IPO.

    Still, there are drawbacks to Stripe’s approach. On the one hand, tender offers and share buybacks may provide some liquidity to employees, this is a temporary fix and not a sustainable, long-term alternative to public market access.

    Secondly, kicking the can down the road indefinitely could result in a lower valuation when the company does eventually go public. Stripe may be the highest-flying payments startup today, but that may not be the case in three or five years. 

    Industry segments Stripe is targeting like AI and stablecoins may cool off in the coming years as investors realize their limitations. And Stripe is far from the first big payments fintech to undergo an overnight conversion to stablecoin believer – Sweden’s Klarna recently announced it plans to issue KlarnaUSD.

    While Stripe has hired major investment banks like Goldman Sachs and JPMorgan Chase to advise on future listing options, no official IPO date has been set. Instead of a traditional IPO, a direct listing may be a more likely route if Stripe does choose to go public in the future, since the company has no pressing need to raise more capital.