CB Insights: global fintech funding totaled $15B in Q1, up 55% QoQ, with Egypt-based MNT-Halan becoming the only unicorn, a first since the end of 2016
Global fintech funding totaled $15 billion in the first quarter of this year, growing 55% from the fourth quarter, according to CB Insights' latest State of Fintech report.
Context & Ripple Effects
The quarter's 55% QoQ jump reads very differently against the arc CB Insights itself has charted: after the record $131.5B across 4,969 deals in 2021, sector funding fell 46% to $75.2B in 2022, with US fintech alone halving to $32.8B. A $15B Q1 2023 is a bounce off a deeply depressed fourth-quarter base, not a return to anything like the 2021 run-rate.
First-order effects
- MNT-Halan crosses the $1B line on the back of February's $260M equity raise paired with $140M in bond issuances, making it the quarter's sole unicorn — the first time a single quarter has minted just one since the end of 2016.
- Late-stage founders and their existing backers face a market where a billion-dollar mark now requires mixing debt into what was previously an all-equity path.
Second-order effects
- Capital is rotating toward markets like Egypt, where MNT-Halan's lending book (over $1.7B disbursed to 4M+ customers per its earlier raises) offers yield-based returns that don't depend on the frozen exit environment punishing US valuations.
- Bond issuance becomes a template other late-stage fintechs can copy to bridge toward unicorn valuations without accepting down-round equity pricing.
Third-order effects
- A quarter with a single new unicorn signals that the 2021 cohort's valuation marks are being structurally repriced rather than paused — and CB Insights' own follow-on data shows the bounce didn't hold, with Q1 2024 funding falling to $7.3B, the sector's lowest since 2017.
- If the pattern holds, emerging-market lenders with real revenue become the sector's default source of new unicorns, shifting where late-stage fintech capital concentrates geographically.
The trend: Global fintech funding is cycling down from its 2021 peak through volatile quarters, with revenue-generating emerging-market lenders like MNT-Halan replacing US consumer plays as the sector's main source of new unicorns.