Global fintech funding continued to decline in Q3 2024, falling by 25% quarter-over-quarter (QoQ) to US$7.3 billion, according to CB Insights’ State of Fintech Q3 2024 report.

Total deals also dropped, with the number of transactions falling 16% QoQ to 753 to reach its lowest quarterly level since 2017. This represents a sharp contraction from Q3 2022 during which 1,500 deals were recorded, underscoring the steep drop in funding activity in the sector over the past two years.

Fewer deals but larger transactions

Although the number of fintech deals declined, the average deal size remained roughly flat year-to-date (YTD) at US$12.7 million, compared to US$13.2 million for full-year 2023. This suggests that dealmakers narrowed their focus to fewer but higher-dollar transactions instead of spreading their investments across a broad range of companies.

Wealthtech bucks the trend

Wealthtech was the standout fintech vertical in Q3 2024, recording a 67% QoQ increase in funding, which rose from US$600 million in Q2 2024 to US$1 billion in Q3 2024.

This growth was fueled by two substantial deals in the US: a US$242 million Series F for retirement plan provider Human Interest, and a US$200 million Series B for Earned Wealth, a digital digital wealth manager target medical professionals.

These transactions ranked as the second and fourth largest equity deals of Q3 2024, respectively.

Digital lending sees robust growth

Digital lending also saw growth in Q3 2024, with funding rising 44% QoQ from US$900 million in Q2 2024 to US$1.3 billion in Q3 2024.

This trend was driven by Asia, which secured 46% of all digital lending funding at US$600 million for the quarter.

Notably, India led the way with some of the largest digital lending transactions in Q3 2024, including DMI Finance’s US$334 million round, M2P’s US$103 million Series D, FlexiLoans’ US$35 million Series C, and Auxilo’s US$33 million Series B.

Asia spotlight: funding in India surges; Singapore sees decline

India was the only market in Asia in CB Insights’ report to record an increase in fintech funding in Q3 2024, which doubled QoQ from US$400 million in Q2 2024 to US$800 million in Q3 2024. However, deal count declined 19%, suggesting fewer and bigger transactions.

Conversely, Singapore experienced a notable decline, with fintech funding halving from US$400 million in Q2 2024 to US$200 million in Q3 2024. Deal count also dipped, falling 34% QoQ from 41 to 27.

Singapore’s top equity deals for the quarter included Partior’s US$60 million Series B, SDAX’s US$50 million Series B2, and WSPN’s US$30 million seed venture capital (VC).

Across Asia, fintech funding declined 12.5% QoQ to US$1.4 billion in Q3 2024, with deal count falling 18.7% QoQ to 175 transactions.

Featured image credit: edited from freepik