Funding for Boston’s Fintech Firms Falls in 2022

January 4, 2023

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I follow roughly 180 active fintech (insurtech, regtech, etc.) startups headquartered in Greater Boston which, by my definition, runs from Portland to Providence and as far west as Springfield. This is up from last year’s count, mostly because I’ve become aware of more startups founded in 2020 and 2021 as they raise their visibility, not because of some Cambrian explosion in 2022. Still, I’d say that fintech in Boston is alive and startup activity remains vibrant.

But as you are likely aware, venture funding for fintech startups is down almost everywhere, and Boston is no exception.  In 2022, 37 local startups raised $814 million in equity. This is a significant drop from last year’s record of 60 startups raising $2.7 billion (and less than in 2020, as well). I am not aware of any new unicorns.

The average raise was roughly $22 million. The tables were led by Circle, which raised $400 million in April from BlackRock, Fidelity, and others. Back out Circle, and the average amount raised was $11.5 million. 

2021 saw two significant IPOs —Toast and Flywire. This year saw none. (Circle seriously considered going public via merger with a Bob Diamond-backed SPAC but in the end thought better of it.)

Surprisingly (at least to me), between Circle, Flipside Crypto2, Foundation Devices, Evaluate.Market and a few others more than half the equity Boston’s fintech startups raised in 2022 went to crypto-related companies. This is not something I expect to see repeated in 2023. Insurtechs, broadly, also were well represented among companies raising capital. Payment firms and firms leveraging AI also found favor.

Funding came from at least 50 different venture funds and investors. California-based Obvious Ventures is the only firm I am aware of that funded more than one of Greater Boston’s fintech startups in 2022. Some notable Boston-based venture investors seem not to have backed any local startups during the year.

M&A activity was also down significantly. Five local firm were acquired in 2022 — BodesWell, QuatroMoney, Redi2, Tarmika, and Wall Street Horizon. Terms were not disclosed for any of them. This compares to 17 companies acquired in 2021. 

Here are the 2022 angel, venture, and private equity funding rounds I tallied (including three for which the dollar amount was not disclosed). I do not include debt financing.

Openly$  75,000,000 
Flipside Crypto $  50,000,000 
OneShield Software$  50,000,000 
Coin Metrics$  35,000,000 
Databento$  31,800,000 
Own Up$  25,500,000 
Conduit$  17,000,000 
Lynx$  15,000,000 
Compt$  13,000,000 
LearnLux$  10,000,000 
eternalHealth$  10,000,000 
Bento$    8,100,000
Foundation Devices$    7,000,000
Sandbox Banking$    5,800,000 
Evaluate.Market$    5,691,992 
PaymentWorks$    5,425,000 
Relativity6$    5,300,000 
Sagewell Financial$    5,270,000 
Givinga$    5,000,000 
Boundless Rider Insurance Agency$    4,750,000 
Fishtail$    4,500,000 
Pebble Finance$    4,000,000 
PayByCar$    4,000,000 
Stackwell Capital$    3,500,000 
Surround Insurance$    2,500,000 
Enthea$    2,000,000 
IndexZoo$    2,000,000 
Envel$    1,900,000 
Daizy$    1,300,000 
Raise Green$    1,200,000 
BCube Analytics$    1,200,000 
Marstone$       539,933 
Kore Compliance$       525,000 
Astor$       250,000 
Physis Investment    undisclosed
Popstox  undisclosed
Candle Finance undisclosed

I am certain to have missed some funding events and exits and to be unaware of some stealthy startups. My sources of data include, in order of authority: Edgar, reputable publications, CrunchBase, disreputable publications, rumor, speculation, and the witting proliferators of misinformation at Meta subsidiary Facebook. But not so much Twitter anymore. I can’t be sure if a company deleted its account or no longer posts as a matter of principle or because it went out of business. Please be in touch if you are aware of any startups, funding events, exits, or closures I have missed.

I discussed what constitutes a fintech startup and how I decide which firms are based in Greater Boston in last year’s funding roundup, for those who are interested.

Flipside raised one of the largest non-biotech Series A rounds in Massachusetts last year.