Startup investment firm ​​Bain Capital Ventures launched a $560M fund focused exclusively on crypto projects.

Despite the record-setting value and amount of venture capital deals for fintechs last year, momentum stalled during Q4. In Q1, investors appear more selective.

In the US, software startups attracted $121.2 billion in venture capital investments last year, more than triple what those in commercial products and services received, at $39.1 billion. Pharmaceuticals and biotech raised the third-highest amount, with $37.8 billion in venture capital.

After historic levels of venture capital investing during the pandemic, VC investing shrank 35% in Q1 2022 from the prior quarter. However, Beezer Clarkson, a partner at Sapphire Partners, told the Post that there’s no indication that startup creation is slowing due to the tech fallout.

Despite pandemic-related financial pressures in 2020, provider organizations accounted for over 30% of digital health corporate venture capital investments—more than biopharma, tech, and payer firms, according to Rock Health. What’s behind this?

Flush with venture capital funding, fintechs are capturing new users by the millions. Big Tech firms like Amazon and Apple, and retailers like Walmart, are becoming increasingly formidable players in financial services. And tech spending by banks has swelled to new heights.

The news: Healthcare price transparency startup Turquoise Health raised $20 million in Series A financing, which was led by venture capital firm Andreessen Horowitz, to launch its direct contracting platform. How it works: Turquoise Health’s platform lets consumers compare costs of care and insurance rates to help them shop around for the most affordable healthcare services in their area.

Companies such as Google and Amazon have explicitly set up internet venture capital funds or incubators to encourage sustainable technology. Amazon seeded its Climate Pledge fund with $2 billion, for instance. And numerous CPG firms and retailers have come together to invest in the Closed Loop Fund to finance circular supply chains that limit waste and protect the environment.

On the other hand, unprofitable tech startups that previously relied on a virtually unchecked flow of venture capital are now having to tighten their belts—and workforce—and show investors they have a path toward profitability.

Venture capital funds poured a record $21.3 billion into digital health in the first three quarters of 2021, per Rock Health, easily surpassing the previous record of $14.6 billion in funding for all of 2020.

Online grocery startups face fierce competition and other growing pains: Venture capitalists have poured billions into these fast-delivery companies, but their success is far from guaranteed.

Lightyear Capital. Reuters. The World Bank.

And several recent venture capital war chests focused on fintechs—including Ribbit Capital’s $1.5 billion pot—also augur elevated investment in the sector.

UK-based and Germany-based startups raised $16.8 billion and $5.3 billion more in total venture capital funding last year than their French counterparts—a larger gap in both cases than in 2020, per a 2022 report from CB Insights.

Space Capital.

UK venture capital firms have typically been later-stage investors, meaning startup founders have had to rely on angel investors, bank loans, and even their own cash for early funding. In October, Clarus Investments found that UK Pre-Series A funding peaked in 2018 at $339.8 million and declined in both 2019 and 2020.

The news: Fintech-focused venture capital firm Ribbit Capital raised its seventh fund to the tune of $1.15 billion, far exceeding its $750 million target and more than doubling its January 2020 haul. How will it use the funding? Ribbit Capital hasn’t said which fintech sectors or geographies it will target—but we think B2B crypto firms might command a sizable share of the war chest.

Venture capital firms invested nearly three times more money in embedded-finance companies in 2021 versus 2020, per PitchBook. Big tech companies are also expected to show continued interest in banking—despite Google’s decision to pull the plug on Plex. However, they will likely attempt to do so by partnering with established financial institutions (FIs).