Many fintech startups will be forced to shutter or sell themselves as they run out of funding in 2023, according to investors, founders and investment bankers.
the Miami-based company and laid off dozens of workers. Surging interest rates and a "recessionary environment" were to blame, he said.Many fintech companies — particularly those dealing directly with retail borrowers — will be forced to shut down or sell themselves next year as startups run out of funding, according to investors, founders and investment bankers.
Top-tier startups that have three to four years of funding can ride out the storm, according to Point72 Ventures partner. Other private companies with a reasonable path to profitability will typically get funding from existing investors. The rest will begin to run out of money in 2023, he said. "What ultimately happens is you get into a death spiral," Casella said. "You can't get funded and all your best employees start jumping ship because their equity is underwater."Thousands of startups were created after the 2008 financial crisis as investors plowed billions of dollars into private companies, encouraging founders to attempt to disrupt an entrenched and unpopular industry.
The movement shifted into overdrive during the pandemic as years of digital adoption happened in months and central banks flooded the world with money, making companies like
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