Dive Brief:

• Payments startups drew $2.2 billion in funding globally during the second quarter, for an increase over the first quarter of this year as well as the year-ago quarter, according to a new report from the research firm CB Insights. U.S. companies drew the largest share of that amount, about a third, by attracting $1.5 billion, the July 16 fintech report said.
• Nonetheless, the number of fundraising events for those payments companies was lower, with 130 fundraisings during the second quarter of this year, down from 148 in the first quarter and 178 in the second quarter of last year.
• The second-quarter increase in venture capital for the industry was driven largely by digital payments juggernaut Stripe landing $694 million during the quarter.

Dive Insight:

Global venture funding for fintech companies, including payments plays, skyrocketed in 2021 as investors jumped on the digital payments craze. But the flow of venture capital ebbed the following year. 

Since then, fintechs have attracted capital in fits and starts, with the sector seeing a slight revival in interest this year. Second-quarter funding for fintech startups climbed to $8.9 billion, up 19% from $7.5 billion in the first quarter and 11% from $8 billion in the year-earlier quarter, according to CB Insights. 

Stripe, founded in 2009 by the brothers Patrick and John Collison, has become one of the most valuable private fintechs in the world, with a recent valuation of $70 billion, based on a share purchase offer by its long-time investor Sequoia Capital. Patrick Collison is CEO of the company, which has dual headquarters in San Francisco and Dublin, while John Collison is president. 

“In a more favorable operating environment, investors are showing greater confidence in later stage companies than they did in the last 2 years,” the report said. “This is especially true in areas like payments and lending, where mid- and late-stage rounds make up 27% and 35%, respectively, of deals [year-to-date].”

Two other U.S. payments firms also benefited from significant fundraisings during the second quarter. New York-based corporate card and bill payment company Ramp attracted $150 million and Covina, California, property management payments processing firm Guesty landed $130 million, according to the CB Insights report.