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HomeTechnologyHow fintech startups are navigating the extension-round rush – TechCrunch

How fintech startups are navigating the extension-round rush – TechCrunch


Because the fintech enterprise market goes, so goes the enterprise market itself. Why? As a result of fintech funding has traditionally made up round one-fifth of each enterprise greenback invested — no less than lately. And after each fintech investing and enterprise capital itself went a bit bonkers final yr, each are coping with a brand new, extra conservative actuality.

For fintech startups, the downturn is actual, and lots of upstart corporations — we realized throughout our latest fintech investor survey — wish to keep away from de-novo rounds that embody a brand new valuation (nobody desires to lift a down spherical!). Due to this fact, extension rounds are a horny possibility for a lot of founders.

However as TechCrunch has reported, whereas extension rounds are in style even past fintech at present, there are sometimes extra startups trying to find the spherical sort than there are checks. So, to raised perceive the marketplace for fintech extension rounds at present, we now have yet another set of solutions from a bunch of fintech enterprise buyers we surveyed. Right here’s the query we posed:

How in style are extension rounds proving? Are you seeing extra corporations choose to lift extensions quite than new rounds in comparison with, say, 2021 and 2020?

Eight buyers answered: Paul Stamas of Normal Atlantic, Alda Leu Dennis of Initialized Capital, Michael Gilroy of Coatue, Justin Overdorff of Lightspeed Enterprise Companions, Addie Lerner of Avid Ventures, David Jegen of F-Prime Capital, Nik Milanović of The Fintech Fund, Jay Ganatra of Infinity Ventures. (Their solutions have been evenly edited for readability.)

Michael Gilroy, normal accomplice and co-head of fintech, Coatue

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