With social distancing and an economic downturn the new reality for many markets around the world, venture capital is expected to slow significantly. Yet demand for contactless payments and digital, automated financial solutions means FinTech funding may not take as hard of a hit as other startup segments.
Reports in American Banker said CB Insights data has revealed a 45 percent decline in year-over-year FinTech funding in the year's first quarter, and a 25 percent drop from Q4 2019.
In the U.S., however, funding for FinTechs actually increased to $3.7 billion, compared to $3.6 billion the same period a year prior, reports said, citing Crunchbase data.
"We haven't seen a substantial pullback yet within the U.S. funding to startups," said Crunchbase data expert Gene Teare in an interview with the publication, which also pointed to Stripe's recent $600 million investment as an example of the resiliency of the FinTech startup ecosystem.
B2B FinTech investments appear to be relatively strong, too. This week, Southeast Asia is in the spotlight, with one U.S. bank technology firm securing $100 million to expand in the region. Plus, an accounts payable technology company announced a $127 million equity round.
India's KarbonCard, a FinTech that offers startups in India and Southeast Asia with corporate card solutions, secured $1 million in new funding from Orios Venture Partners, Whiteboard Capital, and others, according to YourStory reports. The investment is part of KarbonCard's seed round, which secured another $1 million last month. The company aims to connect small businesses and startups to corporate cards that would normally only be available to larger businesses that are able to provide a personal guarantee.
In France, Libeo, which offers invoice processing automation technologies for small businesses in need of accounts payable optimization, secured $4.32 million in new funding. The company is targeting SMBs that need to digitize their AP processes and obtain a clearer view of payments and cash flows, while also connecting teams to streamlined invoice payment capabilities. Libeo said it will deploy the investment to expand its platform to more businesses free of charge as it helps firms navigate current market disruption.
Cross River Bank
As it prepares for an initial public offering (IPO), Cross River Bank has announced a $100 million Series C investment led by V Capital Investments and Shefa Capital, the companies revealed in a press release. The investment also sees Malaysia-based V Capital establishing a strategic partnership with the bank to help it expand throughout Southeast Asia as it seeks its own Digital Bank License in Malaysia. Cross River Bank aims to connect FinTechs and corporates like Amazon and Google with digital banking, lending and deposit services. As an FDIC insured bank in the U.S., Cross River Bank integrates with clients' existing digital banking platforms. The FI didn't reveal how it plans to use the investment but noted it is planning to float in the U.S. next year.
Accounts payable FinTech AvidXchange secured a $128 million funding round, reports this week said, citing Securities and Exchange Commission filing data. The investment follows an impressive $260 million raised by the company earlier this year. AvidXchange saw 52 investors participate in the investment round, which saw equity, options and security provided in exchange for the funding. In its official announcement of the equity funding, AvidXchange highlighted Lone Pine Capital, Schonfeld Strategic Advisors, Pivot Investment Partners, Mastercard, Sixth Street Partners and Neuberger Berman as having facilitated the investments on behalf of their clients, and said it plans to deploy the funding to focus on strategic growth and product innovation.