Like fintech the venture market goes, so goes the venture market itself. why? Because fintech investments have historically accounted for about one-fifth of every venture dollar invested — at least in recent years. And after like fintech investments and venture capital itself went a little crazy last yearboth are dealing with a new, more conservative reality.
The downturn is real for fintech startups, and many new companies — we learned during our time a recent survey of fintech investors — tend to avoid de-novo rounds that involve a new assessment (no one wants to raise a demotion round!). Therefore, expansion rounds are an attractive option for many founders.
But, as reported by TechCrunch, not yet Expansion rounds are popular even outside of FinTech todayare frequent more startups are hunting round type than there are checks. So to better understand today’s market for fintech expansion rounds, we have another set of answers from a group of fintech VCs that we examined. Here’s the question we asked:
How popular are expansion rounds? Do you see more companies opting for extensions rather than new rounds compared to, say, 2021 and 2020?
Eight investors answered: Pavel Stamas General Atlantic, Aldo Leo Dennis initial capital, Michael Gilroy Coatue, Justin Overdorf Lightspeed Venture Partners, Eddie Lerner Avid Ventures, David Jegen F-Prime Capital, Nick Milanovich Fintech Fund, Jay Ganatra by Infinity Ventures. (Their responses have been lightly edited for clarity.)
Michael Gilroy, General Partner and Co-CEO of Coatue, a fintech company