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 — at the least lately. And after each fintech investing and enterprise capital itself went a bit bonkers final 12 months, each are coping with a brand new, extra conservative actuality.
For fintech startups, the downturn is actual, and plenty of upstart firms — we discovered throughout our current fintech investor survey — wish to keep away from de-novo rounds that embrace a brand new valuation (nobody needs to lift a down spherical!). Due to this fact, extension rounds are a gorgeous choice for a lot of founders.
However as TechCrunch has reported, whereas extension rounds are standard even past fintech at present, there are sometimes extra startups looking for the spherical sort than there are checks. So, to higher perceive the marketplace for fintech extension rounds at present, we’ve got yet one more set of solutions from a bunch of fintech enterprise traders we surveyed. Right here’s the query we posed:
How standard are extension rounds proving? Are you seeing extra firms decide to lift extensions slightly than new rounds in comparison with, say, 2021 and 2020?
Eight traders answered: Paul Stamas of Basic 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 frivolously edited for readability.)