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Fintech representation in YC's Demo Days is definitely shrinking

Image Credits: Bryce Durbin/TechCrunch

Welcome to TechCrunch Fintech! This week, we’re looking at just how many fintech companies made it into Y Combinator’s Winter 2024 cohort, how much funding slid in the first quarter, and more!

To get a roundup of TechCrunch’s biggest and most important fintech stories delivered to your inbox every Sunday at 7:00 a.m. PT, subscribe here.

The big story

Y Combinator held demo days for its Winter Cohort this week. As always, the TC team was all over it. One thing that stood out to me was just how much fintech representation in their cohorts is shrinking. Of the 260 companies in the latest cohort, nearly 30 of them, or 8%, were classified as fintech. That compares to 10% in the summer of 2023, 21% in the summer of 2022 and 24% in the winter of 2022. So there was one-third the percentage of fintech companies this year compared to two years ago. Of the companies that were picked this year, Christine noticed that cross-border fintech is hot right now.

Analysis of the week

Fintech funding slid by 16% quarter-over-quarter during the three-month period ended March 31, according to CB Insights’ Q1 2024 State of Venture Report. But even more troubling than the double-digit dip was the fact that the $7.3 billion raised globally by fintech startups in the three-month period marked the lowest level the sector has seen since early 2017. On the plus side, there was a 15% uptick in equity deal-making last quarter, which “means investors continue to show interest in fintech solutions — particularly payments tech,” according to a CB Insights spokesperson. During the three-month period, 904 investments were made into fintech startups, which was higher than 786 in the previous quarter, signaling smaller deal sizes.

Dollars and cents

Manish Singh reports that Flipkart co-founder Sachin Bansal is in talks to raise capital for his new startup, Indian fintech Navi. Bansal is talking to investors to raise at a valuation of around $2 billion, three sources familiar with the matter told TechCrunch. One source said he is looking to raise between $200 million and $400 million. Bansal has largely self-funded Navi up to now, and this would be the Bengaluru-headquartered startup’s first large outside fundraise since it was founded in 2018.

What else we’re writing

For years, banks have been financing large renewable power projects, from utility-scale solar farms to horizon-spanning wind farms. But smaller projects, like installing a heat pump in someone’s home or retrofitting affordable housing, often get passed over. They simply haven’t been lucrative enough. But the demand is there, which is why advocates have been clamoring for the federal government to support a so-called green bank, which will underwrite these sorts of projects.

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That green bank is now a reality. Last Thursday, the EPA announced that it had awarded $20 billion in grants from the Inflation Reduction Act to eight organizations that will use the money to make loans that will help with those projects, reports Tim De Chant.

High-interest headlines

Hapax launches with generative AI tool for financial services

Houston tech platform raises Series C round backed by Mastercard

Brim Financial closes $85M Series C led by EDC to fund US expansion

Advent to buy Ryan Reynolds-backed fintech Nuvei in $6.3B deal

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