Apr 25, 2025

CB Insights Q1: Fintech Funding Rebounds, Driven by the AI and Digital Asset Verticals AI companies represent an increasing share of fintech deals, digital asset startups are leading early-stage investments, and digital banking ventures are showing the strongest growth potential across the whole fintech industry. Get the hottest Fintech Switzerland News once a month in your Inbox Fintech funding is witnessing a resurgence this year, fueled by large rounds of funding going towards late-stage ventures, according to a new data from CB Insights. Artificial intelligence (AI), digital assets and digital banking are among the most active verticals, marked by increased deal activity, significant capital inflows, and strong growth potential Fintech funding rebounds Fintech investment made a comeback in Q1 2025, with companies in the sector raising a total of US$10.3 billion. The sum marks an 18% quarter-over-quarter (QoQ) increase, and the first time in two years that fintech funding surpassed the US$10 billion threshold. This growth was driven by larger, late-stage rounds, most notably the landmark US$2 billion deal secured in March by Binance from MGX, an Abu Dhabi-based AI and advanced technology investor. The transaction marked Binance’s first institutional funding round and set records as both the largest-ever investment in a crypto company and the biggest transaction paid entirely in a stablecoin. Global quarterly fintech funding, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 Mega-rounds drive growth Fintech funding activity in Q1 2025 was led by mega-rounds worth US$100 million and over. These transactions secured a total of US$4.5 billion through 14 deals during the quarter, representing a significant increase from US$1.8 billion and 11 mega-rounds during the same period in 2024. Quarterly funding and deals from mega-rounds, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 This inflow in capital pushed the median deal size to US$4.1 million in 2025 year-to-date (YTD), up 5.1% from US$3.9 million in 2024. Despite the growth in deal value, total deal volume slipped 3% QoQ to 777 transactions, marking a fourth straight quarterly decline. Investor appetite for early-stage rounds also waned, with these deals making up a smaller share of funding activity by accounting for 67% of fintech deals in 2025 YTD, down 8 points from 72% in 2024. Annual percent of deals by deal stage, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 AI in fintech draws increased investor interest In Q1 2025, AI companies continued to attract investors’ interest, capturing a larger share of all fintech dealmaking. During the quarter, AI companies targeting fintech closed a total of 122 rounds, representing 15.7% of all fintech deals. The figure marks a new all-time high for the sector, and is more than double their share during Q4 2022 when OpenAI launched ChatGPT. AI companies’ share of fintech funding also ticked up in Q1 2025, rising to 17%. Quarterly share of fintech deals going to AI companies, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 The biggest deal to an AI-powered fintech company in Q1 2025 was secured by Figure, an alternative lending closed a US$200 million round in February. Founded in 2018 by former SoFi CEO Mike Cagney, Figure offers automated home improvement, business, and debt consolidation loans, and which allows cryptocurrency investors to use digital assets as loan collateral. The startup servs over 100,000 households in 47 American states. Digital assets lead early-stage deals Digital asset was another prominent fintech vertical in Q1 2025, with more than half of the top seed and Series A deals secured during the Q1 2025 going towards companies developing crypto, blockchain, and digital asset solutions. Share of digital asset companies among top early-stage deals in Q1 2025, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 Later-stage activity was also robust. Among the ten biggest fintech deals, three went to crypto and blockchain companies: Binance, Phantom and ZenMEV. Phantom, a crypto wallet focused on the Solana blockchain, raised a US$150 million Series C in January at a US$3 billion valuation. The round was co-led by Sequoia Capital and Paradigm, with participation from existing investors including a16z crypto and Variant. ZenMEV, a blockchain platform designed to democratize access to maximal extractable value (MEV), secured a US$140 million investment in March. The capital came from VC VentureX, a VC firm specializing in Web3 and decentralized finance (DeFi). Another milestone in the digital asset space came with Sygnum’s rise to unicorn status. The digital asset bank completed in January 2025 an oversubscribed US$58 million round, achieving a post-money valuation of more than US$1 billion. Sygnum provides regulated banking, asset management, and tokenization services for cryptocurrencies and blockchain-based assets. It serves professional and institutional investors, banks, corporates and distributed ledger technology (DLT) foundations. In addition to Sygnum, two other fintech startups reached unicorn startups in Q1 2025: Plata, a Mexican startup offerings credit cards, cashback, and buy now, pay later (BNPL) services, which raised a US$160 million Series A round in March and which is now valued at US$1.5 billion; and Assured Insurance Technologies, an insurtech company providing insurance carriers with white-label software-as-a-service (SaaS) solutions, which raised an undisclosed growth-stage funding in March, valuing the company at US$1 billion. Top fintech equity deals in Q1 2025, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 Digital banking shows resilience Though digital banking companies witnessed a decline in both funding value and volume in Q1 2025, the sector showed resilience. Among all major fintech verticals, the category now has the highest average CB Insights Mosaic score at 559, ahead of AI in fintech (512), and payments (481). CB Insights Mosaic score measures the health and growth potential of private tech companies on a 0-1,000 scale. Average mosaic score out of 1,000 as of March 31, 2025 by fintech vertical, Source: State of Fintech Q1 2025, CB Insights, Apr 2025 Mercury is a San Francisco-based fintech company providing banking, credit cards, and financial software; Varo is a US-based, fully digital bank that offers no-fee banking services, including checking, savings, and early direct deposit, through a mobile app; and Moniepoint, based in Nigeria, provides banking and payment services to small and medium-sized enterprises (SMEs), aiming to bridge the financial services gap for small businesses.