Sedgwick and Wiz Dominate Amidst 37% YoY Decline in US FinTech Funding for 2024

Sedgwick and Wiz Dominate Amidst 37% YoY Decline in US FinTech Funding for 2024

In 2024, the US FinTech industry witnessed a significant downturn in funding, highlighting the challenges faced by investors in a shifting economic landscape. This article delves into the key statistics that define the current state of US FinTech investments, shedding light on trends and notable funding rounds.

Decline in US FinTech Funding in 2024

The US FinTech funding landscape saw a steep decline of 37% year-over-year in 2024. This downturn reflects a broader trend of reduced deal activity and total funding compared to previous years:

  • A total of 1,868 deals were recorded, down 56% from 4,237 deals in 2023.
  • Total funding for the year reached $51.0 billion, significantly lower than the $80.4 billion raised in 2023.
  • Comparing to 2020, when the sector attracted $92.1 billion, the decline is even more pronounced.

This decline is indicative of a cautious investment climate, as investors are becoming more selective in their funding choices amidst economic uncertainties and a tightening regulatory environment.

Increase in Average Deal Value

Despite the overall decrease in funding, the average deal value in the US FinTech sector increased significantly:

  • The average deal value rose to $27.3 million, an 18% increase from $19 million in 2023.
  • This represents a 65% jump from the $17.5 million average in 2020.

This trend indicates that while the volume of investments has decreased, funding is being concentrated in fewer, larger deals. Investors are prioritizing established companies that exhibit clear growth potential over a larger number of smaller startups.

Kiteworks: A Notable Funding Success

One of the standout successes in 2024 was Kiteworks, a secure content company focusing on protected data sharing. The company secured a remarkable $456 million funding round, making it one of the largest deals in the US FinTech space this year.

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This funding round, led by Insight Partners and Sixth Street, was characterized as a “partial liquidity event” which allowed some investors to cash out while still retaining a minority stake in the company, valuing Kiteworks at over $1 billion.

Founded in 1999 and previously known as Accellion, Kiteworks has now raised a total of $592 million, following a previous $120 million round in 2020 led by Bregal Sagemount. The latest funding will aid Kiteworks in enhancing its secure data exchange platform, enabling reliable communication for clients managing sensitive information.

Conclusion

The 2024 US FinTech funding landscape is characterized by significant challenges, marked by a decrease in overall funding and deal volume. However, the increasing average deal value suggests a shift toward larger, more established companies that promise high growth. For more insights and updates on the FinTech sector, explore our FinTech news section or visit Investopedia for comprehensive financial explanations.

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