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 yr, each are coping with a brand new, extra conservative actuality.
For fintech startups, the downturn is actual, and lots of upstart firms — we realized throughout our current fintech investor survey — wish to keep away from de-novo rounds that embrace a brand new valuation (nobody desires to boost a down spherical!). Subsequently, extension rounds are a pretty choice for a lot of founders.
However as TechCrunch has reported, whereas extension rounds are common even past fintech at this time, there are sometimes extra startups looking for the spherical sort than there are checks. So, to raised perceive the marketplace for fintech extension rounds at this time, now we have another set of solutions from a gaggle of fintech enterprise buyers we surveyed. Right here’s the query we posed:
How common are extension rounds proving? Are you seeing extra firms decide to boost extensions slightly than new rounds in comparison with, say, 2021 and 2020?
Eight buyers answered: Paul Stamas of Common 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 calmly edited for readability.)