Fintech Funding Drops, But AI Brightens Prospects.

What we’ll cover today:

💡 Shifting Focus to Early-Stage Fintech.

🧠 Vitalik is Not Wrong About DeFi.

🚧 Fintech, a Tough Space to Build in.

🔗 The Event Roundup.

Shifting Focus to Early-Stage Fintech.

The fintech investment scene has taken a hard hit.

This year, only 1 in 12 VC dollars went to fintech—a sharp drop from 1 in 5 in 2021.

Fundraising is at a six-year low, down 91% since its peak.

Investors are shifting gears, focusing on early-stage deals over big-ticket projects.

Here’s the shift in numbers:

• Early-Stage Surge: Seed rounds now outnumber Series A, signalling new value trends.

• Big Deals Down: Large ($100M+) transactions dropped from 65% of deals in 2021 to 34% in 2024.

But here’s the twist—AI is lighting up fintech’s future:

• Higher Returns: AI-native fintech companies deliver nearly double the value per dollar compared to traditional fintechs.

• Efficiency Gains: 80% of fintechs are improving their EBITDA margins.

• Longer Runways: More companies now have stronger operational timelines to push innovation.

With these changes, a revival is on the horizon for 2025, where AI’s game-changing potential could make fintech’s future bolder than ever.

Here’s the whole article

1. Vitalik is Not Wrong About DeFi.

This is a tweet from the CEO of Helius Labs. 

Vitalik Buterin recently expressed doubts about DeFi's sustainability without real-world economic links, warning that finance isolated from tangible value is circular and unsustainable. 

A recent tweet from Helius’s CEO echoed this, emphasising that DeFi’s success hinges on businesses generating real-world value that DeFi can then facilitate.

Here's The Whole Tweet.

2. Fintech, a Tough Space to Build in.

This is an article from Alex Jhonson, founder, author, and chief question-asker at Fintech Takes.

He adds: “Banks and software companies are fundamentally different, which makes fintech (literally the combination of banking and software) a tough space to build in.

The key to success (I believe) is building mutually beneficial partnerships.”

Here’s The Article

1. Streamlining corporate client onboarding: the benefits of automated CDI.

Banks face numerous challenges when onboarding corporate clients in today's rapidly evolving financial landscape.

Integrating automated Corporate Digital Identity (CDI) systems promises to revolutionise this critical process. A recent series of reports by Chartis and Encompass highlights how embracing CDI can effectively address these challenges.

2. Indian fintech Slice seals bank merger

Indian fintech startup Slice said it has completed its merger with North East Small Finance Bank, marking a rare instance of a startup successfully entering India’s tightly regulated banking sector.

The merger, first proposed last year, transforms the Bengaluru-based startup into a banking entity, following months of regulatory scrutiny.

3. European Cybertech Filigran announces $35m in Series B funding.

The funding, led by global software investor Insight Partners, also saw continued support from existing investors Accel and Moonfire. This capital injection arrives just months after Filigran’s $16m Series A, highlighting the company’s rapid growth and ongoing commitment to global expansion and product innovation.