The London Stock Exchange Group supports a new fintech financing review as venture capital dries up

The London Stock Exchange Group has emphasized a new review of the fintech financing landscape today as risky cash dries up and valuations plunge in the face of a looming recession.

The new A review of Fintech Funding, launched by industry group Fintech Week London (FTWL) today, will look to bring together regulators, investors and financial firms to meet the rapid deterioration of the fintech venture capital landscape.

The FTWL said they had already received support from the London Stock Exchange for the new review and were now seeking input from across the industry as it launches Fintech Week London today.

Chief Raf de Kimpe told City AM that the sharp drop in valuations and financing will dominate much of the conversation throughout the week.

“Now more than ever, especially after the pandemic and with what is happening in the economy, it is important for people to find the right partnerships and the right collaborations and even learn from each other on how to deal with this,” he said. City AM

“We will look at what has happened with financing, how can we learn from this and how can we work together to ensure that the industry is better than before.”

The review comes as central banks around the world raise interest rates and put an end to the cheap money that has driven investment madness over the past decade.

Global venture capital continued the decline in the second quarter of the year, with financing falling almost 23 per cent compared with the first quarter of the year.

About $ 108.5 billion was raised over 7,651 deals last quarter – marking the largest quarterly percentage drop in deals and the second largest drop in funding in a decade, according to data from research firm CB Insights.

Fintech companies have also cut the number of employees and scaled down growth plans as they want to quickly track the path to profitability, with some of the industry’s most prominent names plagued by sharp declines.

Buy now, pay later giant Klarna, formerly Europe’s most valuable fintech with $ 46 billion last year, is now valued at just $ 6.5 billion after its last round of financing. The company also announced that it would cut the workforce by ten percent in recent weeks to cope with the technological downturn, and would shift its investments to focus on profitability.

The British banking app Curve was among those who announced redundancies this year, cutting 60-70 jobs, while the American giant Robinhood recently cut nine percent of employees and the cryptocurrency exchange Coinbase lays off 18 percent of the workforce.