Looking across all fintech categories, funding boomed 187% quarter-over-quarter in Q1’25. For the first time in two years, it was over US$10 billion. This wake-up call originates from massive investments from digital asset and AI companies. In fact, this equates to a stunning 18% quarter-over-quarter (QoQ) growth. Even if the number of fintech deals is down, the median fintech deal size has increased. This change represents a larger movement toward fewer, more strategic investments, particularly in the seed space.

Fintech Funding Rebound Driven by Mega-Rounds

Fintech funding activity in Q1 2025 was mostly driven by mega-rounds, which are defined as rounds valued at US$100 million or greater. These $3 billion in investments were key in pushing that total funding over the US$10 billion line. This round turn hasn’t been passed since early 2023. This resurgence signals renewed investor confidence in the fintech sector, particularly in companies demonstrating innovative approaches and strong growth potential.

In Q1 2025, Figure, an AI-driven alternative lender, netted the biggest fintech contract of all time. They recently capped off their nascent funding round success with a US$200 million Series D closing in February. ZenMEV, an emerging blockchain platform that denies MEV, recently raised a US$140 million investment round led by… Binance, a crypto and blockchain company, received a US$2 billion strategic investment from MGX in March 2025.

As a result, prominent challenger banks secured significant investments. Mercury completed US$300 million in Series C, Varo raised US$29 million in Series G, and Moniepoint received a US$10 million investment from Visa. Sygnum, a digital asset bank, completed an oversubscribed US$58 million round in January 2025, achieving a post-money valuation exceeding US$1 billion.

AI and Digital Assets Lead the Way

AI companies made major gains in their share of fintech funding, jumping to 17% in Q1 2025. This increase is representative of the rising significance of AI in revolutionizing financial services. AI companies took a bigger percentage of overall fintech dealmaking in Q1 2025.

AI companies focused on just fintechs had a record 122 rounds in Q1 2025, or 15.7% of all fintech deals. This serves as a powerful testament to the growing role of AI technologies in shaping nearly every fintech sub-sector. These deals underscore the strategic significance of AI as a key driver of innovation and operational efficiency across the financial services landscape.

Digital asset companies certainly played a loud tune on the early-stage deals in Q1 2025. This momentum further demonstrates the rising demand, innovation, and investment in open blockchain-based financial solutions. The success of companies like Sygnum and ZenMEV underscores the potential of digital assets to reshape traditional banking and investment models. This growth trend is a clear sign that investors are becoming more attuned to the long-term value and disruptive potential of digital asset technologies.

Deal Volume and Median Size

Q1 2025 fintech deals reached only 777 transactions, a 3% QoQ decrease. While the total deal volume for the sector decreased a bit, fintech companies have seen an increase in their median size of deals. As of 2025 ytd, it has risen to US$4.1 million, a 5.1% increase from US$3.9 million in 2024. This increase suggests a shift towards larger, more strategic investments, potentially indicating a maturing market where investors are focusing on higher-quality deals.

Early-stage rounds accounted for 67% of fintech deals in 2025 YTD, an 8-point decrease from 72% in 2024. This decrease in early-stage deals could reflect a broader trend of investors seeking more established companies with proven business models. At the same time, the persistence of early-stage rounds underscores the innovation still building and bursting from the fintech scene.