like the fintech venture market goes, so goes the venture market itself. Why? Because historically, fintech investments have accounted for about a fifth of every venture dollar invested — at least in recent years. And after both fintech investment and venture capital went a little crazy last year, both are facing a new, more conservative reality.
For fintech startups, the downturn is real, and many startup companies – we learned in our recent fintech investor survey – want to avoid de novo rounds that include a new valuation (nobody wants to raise a downside round!). That’s why renewal rounds are an attractive option for many founders.
But as toptecheasy.com has reported, although expansion rounds are popular these days, even outside of fintech, there are often more startups chasing the round type than there are checks. So to better understand today’s fintech expansion rounds market, we have another set of responses from a group of fintech venture investors we surveyed. This is the question we asked:
How popular are renewal rounds? Do you see more companies choosing to increase renewals instead of new rounds compared to, say, 2021 and 2020?
Eight investors replied: Paul Stamas from General Atlantic, Alda Leu Dennis of initialized capital, Michael Gilroy from Coatue, Justin Overdorff from Lightspeed Venture partners, Addie Lerner from Avid Ventures, David Jegen from F-Prime Capital, Nik Milanovic of the Fintech Fund, Jay Ganatra from Infinity Ventures. (Their answers have been slightly edited for clarity.)