Enterprise fintech startup market map

The financial technology industry continues to be an attractive place for investors despite economic headwinds ranging from inflation to higher interest rates as the pandemic led more people and businesses to rely on digital financial services.

Fintech can be divided into two distinct segments: retail and enterprise. Retail fintech companies deal directly with customers, while fintech companies focus on businesses, banks and other financial institutions.

Despite the general caution regarding broader economic uncertainty, enterprise fintech companies remain prime candidates for investors because of their indispensability to businesses, as well as the significant opportunities that remain for growth. With half of all payments made between businesses made via physical checks, there is plenty of room for these companies to grow, according to PitchBook analyst Rudy Yang. Higher demand from businesses for software and platforms that focus on cost savings may also contribute to growth.

In today’s cost-cutting environment, tools that help CFOs better control expenses, payroll and budget forecasts are in high demand. The CFO stack segment remains relatively well funded and was the second most funded sector in B2B fintech in 2022. Even amid the overall drop in VC deal value, the sector has held up relatively well, according to Yang.

The market map below outlines the global corporate fintech VC ecosystem. Explore the CFO stack segment by clicking on the blue tile.

To go deeper, read our introduction Enterprise Fintech Report. PitchBook subscribers can also explore full market map with details of more than 3,400 companies.

Spotlight: CFO Stack

CFO stack companies fall into four sub-segments.

• Accounting, tax and compliance. Platforms and other technology to automate processes related to accounting and tax documentation in addition to helping businesses comply with regulations in these areas.
• Budgeting and forecasting. Technology that helps companies with budgeting and financial forecasting.
• Expense management and AP/AR automation. Companies that help automate and manage expenses and invoices as well as accounts payable and accounts receivable.
• Salary and earned salary access. Companies that help businesses automate payroll operations such as onboarding as well as setting up different payment options for employees.

In Q4 2022, there were 375 deals worth $4.2 billion, representing a 37.3% quarter-over-quarter decline in deal value while the number of deals remained flat, according to PitchBook data. This marked the third quarter in a row with a decrease in contract value.

As was the case for the broader VC market, 2022 was a down year compared to the lofty heights set in 2021. With $35.1 billion raised across 1,764 deals in 2022, the number of deals and total deal value fell by 13, respectively. 1% and 32.1% in the year-over-year. However, it was still the second highest year on record, largely driven by a strong first half.

Despite the quarterly decline in deal value, there were some notable deals in the last quarter of 2022, such as a $130 million Series B expansion for regulatory technology platform developer TRM Labs and a $131 million Series A for platform developer for financial planning, Updraft.

There were 150 exits worth $18.1 billion in 2022, down sharply from the previous year but more in line with activity from 2018 to 2020.

This sharp decline follows trends in fintech as a whole, according to the report, with exit activity as a whole continuing to stagnate in the immediate future.

Notable exits in Q4 included credit financing provider Nearside being acquired by Plastiq for $130 million, and mortgage and mortgage management platform developer OpenClose being acquired by MeridianLink for $65 million.

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