FinTech Co Processes $140 Billion Annually, A Fraction Of The Huge Market Opportunity

While a host of industries are feeling the impact of COVID-19, many FinTechs have seen a surge in usage over recent weeks. Yet there have been warnings that the pandemic is having a negative impact on FinTech funding.

According to data from CB Insights, while the past three years all saw between 200 and 300 deals December through March, that has declined to between 100 and 200 deals over the same period in 2019-2020. Deals are falling across Asia, Europe, and North America, with each region set to see the lowest quarterly deal count in years.

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However, there are some FinTechs that are avoiding this issue: Companies that provide financial and payment services are currently receiving a large amount of funding—and analysts don’t expect that to stop after the pandemic ends.

“This is a one-way street,” QED Investors founder Nigel Morris told Reuters.

U.S. startup Stripe, for example, revealed last week that it had raised $600 million from investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia. And Fast, a one-click checkout tech company, recently raised $20 million in a funding round.

Another FinTech seeing a healthy dose of funding is AvidXchange, which announced that it has raised an additional $128 million in equity capital. This latest round was oversubscribed with a total of more than $388 million raised and includes AvidXchange’s previously announced closing of $260 million in equity financing earlier this year.

Founded in 2000, the company offers automating invoice and payment processes for mid-market businesses through a platform that allows businesses to eliminate the paper invoice and paper check. The company processes over $140 billion transactions annually across its network of more than 600,000 suppliers—and is one of the fastest growing technology companies in the U.S. 

“With only 40 percent of U.S. businesses automating their accounts payable processes, we continue to solve a real problem for companies that still rely on paper invoices and checks, fundamentally changing the way they pay their bills” said Michael Praeger, Co-Founder and Chief Executive Officer at AvidXchange. “This has become even more evident as we see businesses implementing continuity plans and shifting to work from home models, making automation essential to support mission critical processes and keep operations running.”