Investment in payment startups: Presenting an industry overview of financial backers
In a comprehensive report, the focus on investment stages and regional interests within the payments industry is examined to shed light on the sector's current standing and future growth.
Despite a global drop in funding, companies in the payments industry managed to raise a combined total of $24.4bn in 2022, slightly surpassing the $23.1bn raised in 2021. However, the drop in funding was particularly sharp in the second half of 2022, with global venture funding falling by 35%, down to $445bn from $681bn in 2021.
The report identifies the key regional focuses for investment in the payments industry, with geographical focus for payments investments including the US, UK, India, Singapore, Brazil, France, UAE, Canada, Germany, and Nigeria. North America, particularly the US and Canada, saw the highest volume and funding amounts in deals, with large financing rounds involving US companies like WorldPay ($12.5B) and EngageSmart ($4B), and Canadian firms like Nuvei ($6.3B) in 2024.
Europe, Middle East & Africa (EMEA) saw significant but comparatively lower funding, with top deals including UK-based IRIS Software Group ($4B) and Abound ($1B). Emerging markets such as Brazil and Argentina also attracted fintech investments but at smaller scales compared to North America and Europe.
The most prolific payments investors in 2022 tended to be large venture funds and strategic corporate venture arms like PayPal Ventures, focusing their investments predominantly in North America, with solid interest in EMEA and growing activity in Latin America. Other prominent investors in the payments industry include Tiger Global Management, Global Founders Capital, Y Combinator, Gaingels, and Tencent.
As for the stages of investment that are being focused on in the payments industry, the report offers insights into who is being attracted to invest in the sector. Startups in the payments industry are attracting the most investment, with VCs now expecting startups to demonstrate a more robust path to profitability to attract support.
The report also provides indications for the future development of the payments industry based on the investment activity in 2022. The findings of this report aim to determine how the payments industry is faring and where future growth is likely to be focused by examining the investors in the payments industry in 2022.
The report highlights that large venture funds and strategic corporate venture arms, such as PayPal Ventures, majorly invest in the payments industry, with a predominant focus on North America, followed by strong interest in EMEA and growing activity in Latin America.
The findings of the report suggest that startups in the payments industry are currently attracting the most investment, with investors now seeking evidence of a more robust path to profitability in potential investments.
