VC Investment for Tech Startups — The Current Landscape

We’re now more than halfway through 2022, which is always a great time to take a look at market analysis and review the investment landscape. What types of ventures are getting plenty of funding? What’s slowed down? Not only is this vital for tech startups wanting to understand the market they’re entering into, it also helps founders build effective business plans and look out for who to build potential investment relationships with. Let’s look at the investment news so far this year.

Could the FinTech Boom Be Crashing?

According to TechCrunch, financial technology apps and offerings were worth a fifth of every VC dollar invested in 2021. A major factor that impacted this was, of course, the pandemic. Businesses that suddenly needed to keep customers engaged when they couldn’t interact with them physically required whole new ways of maintaining safe, secure financial transactions. For consumers, FinTech services have meant they can bank exclusively online or even on a smartphone, search for mortgages, get loans, apply for credit cards, and even change account providers without ever stepping through the doors of a bank. The en masse digitization of finances is well underway. Of course, the downside is that once every financial institution and every consumer has all the financial tech they need, where do FinTech startups go from here?

Well, it seems that the only way really is up. In Q1 2022, FinTech startups raised $32.4 billion worldwide. That’s down 10% from the highs of Q3 2021, but up by 27% year-on-year. Compare this to overall VC funding, which is up by just 4%. Notable financings in recent weeks include Supermojo, a financing platform aimed at making digital assets more accessible. They announced completion of a seed round led by BH Digital and DRW Venture Capital but did not disclose the amounts involved. Another winning startup is Apiture, a provider of digital financial solutions for banks and credit unions. They’ve recently received $29 million in a financing round led by Live Oak Bank.

It's clear that the FinTech industry is alive and kicking, and it’s interesting to see new ventures focusing on digital assets such as NFTs — something we’ll no doubt be hearing more about as the year progresses.

InsurTech Funding Stays Steady

We recently reported on expected trends for InsurTech in 2022, including the rise in startups focusing on risks associated with cybercrime, and the high volume of SaaS and apps utilizing AI and machine learning (ML). Unsurprisingly, in our volatile economy and unstable global landscape, many InsurTech startups are receiving funding from a variety of sources. In early August 2022, business insurance platform providers Mulberri raised a seed of $4 million. Their platform makes accessing and managing insurance easier for brokers and professional employer organizations (PEOs), and the funding will go straight back into improving the platform’s infrastructure and data modeling. 

A week or so before this, an InsurTech MGA in the trucking industry, Koffie Insurance, announced plans to plumb the $11 million they’ve received in new VC financing into new hires and responsible underwriting and practices. It seems like successful InsurTech companies are the ones planning for the future, impressing potential investors with long-term strategies and careful investment plans of their own. 

Final Word

VC investment has definitely slowed, with factors like conflict and supply chain issues impacting investors’ choices worldwide. Should tech startups despair? Absolutely not. There is still plenty of money out there and plenty of venture capitalists looking for the right ventures to invest in. In fact, investors are more likely to be interested in an offering that’s marketed and branded well, and if it appears to promise great things, then it’s an ideal addition to their portfolio in a crowded and complicated tech market.

How are you managing your branding right now? Do you know how to cut through the noise and get your product or service in front of the right people? Arch Collective now offers a full branding package ideal for early-stage startups, helping you to gain recognition and visibility for those all-important investor pitches. If you want to learn more about the right branding strategy or onboarding a marketing executive, book a 15-minute introductory call with us, and our experienced team can connect you to the right freelancer for your tech proposition.

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