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 — no less than in recent times. 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 corporations — we discovered throughout our latest fintech investor survey — want to keep away from de-novo rounds that embrace a brand new valuation (nobody needs to boost a down spherical!). Subsequently, extension rounds are a gorgeous possibility for a lot of founders.
However as TechCrunch has reported, whereas extension rounds are common even past fintech at present, there are sometimes extra startups trying to find the spherical sort than there are checks. So, to higher perceive the marketplace for fintech extension rounds at present, we have now yet one more set of solutions from a gaggle of fintech enterprise traders we surveyed. Right here’s the query we posed:
How common are extension rounds proving? Are you seeing extra corporations decide to boost extensions moderately than new rounds in comparison with, say, 2021 and 2020?
Eight traders answered: Paul Stamas of Normal 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.)