Global Fintech VC Funding Declines to $30 Billion in 2023 from 2021 Peak of $92 Billion, WEF Report Reveals
The World Economic Forum’s September 2024 report, titled “Fuelling Innovation: Closing Fintech Funding Gaps,” highlights a significant decline in venture capital (VC) funding for the fintech sector.
According to the report, VC funding dropped to $55 billion in 2022 and further to $30 billion in 2023, marking a sharp 67% decrease from the 2021 peak of $92 billion.
Despite this decline, fintech has seen substantial growth over the years, with over $350 billion in VC funding since 2015, resulting in the industry generating more than $150 billion in global net revenue as of 2023.
The sector is expected to continue expanding, with projections estimating revenues will reach $400 billion by 2028.
The report also underscores regional disparities in fintech funding. Sub-Saharan Africa (SSA), Latin America and the Caribbean (LAC), and the Middle East and North Africa (MENA) collectively received just 10% of global fintech funding between 2020 and 2023.
Yet, these regions are projected to contribute 15% of global fintech revenue by 2028.
Contrary to the global downturn, some regions have exhibited remarkable growth. LAC achieved the highest funding compound annual growth rate (CAGR) over the past decade at 37%, even though it experienced an 81% decline since the 2021 peak.
Similarly, MENA saw fintech VC investments grow at a 33% CAGR, with the total volume of funding more than tripling from $600 million in 2020 to $1.9 billion in 2023.
The report’s findings emphasize the need to address the uneven distribution of fintech funding, particularly in regions with significant growth potential that are currently underfunded.
