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.