Market Map: Fintech payment startups hold their own in uncertain times

On Aug 16, 2022

To go deeper, read our Q2 2022 Fintech Report. PitchBook subscribers can also explore the full fintech market map with details on nearly 1,200 companies.

Spotlight: Payments

Payment companies fall into five sub-segments:

Business products and services payments: Services that facilitate payments between businesses, wire transfers and alternative forms of checks and cash.
Cross border and FX: Companies that focus on cross-border transactions, including currency exchange services.
P2P and remittance: Services facilitating peer-to-peer transactions such as remittances and other noncommercial transfers of money.
Payment platforms and POS: Payment-accepting services such as payment processing software and APIs, among others.
Payroll and AP/AR automation: Technologies and software that help corporate finance teams and accountants manage cash flow.

How deals and exits are trending

There were 1,103 fintech VC deals worth $24.1 billion in the second quarter of 2022, representing a decline of 17.8% in deal value quarter-over-quarter, the largest such drop since Q3 2018. The number of deals cut also declined by 24.4% from Q1 to Q2 2022.

The payments segment, which makes up the biggest share of deal value among fintech startups, raised $7.6 billion in Q2 2022, a drop of 18.7% from $9.3 billion in the first quarter.

Despite this slowdown, there were some notable deals during the quarter, including a $748.3 million Series C for expense management specialist Ramp, $626.6 million for point-of-sale software and hardware developer SumUp and $524 million for API-based payment company Scalapay.

Exit activity is down significantly from 2021, largely due to the IPO market grinding to a halt. There have been 157 exits worth $21 billion in the first half of the year, far off the pace needed to match last year’s total of $369.7 billion.

Notable exits include an $8.5 billion public listing for credit technology developer Pagaya and a $1.1 billion acquisition of Australian stock trading app Superhero.

VC exits in 2022 should shift from primarily public listings to M&A due to established fintech companies seeking to acquire other fintech specialists, PitchBook analyst Robert Le said.

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