CB Insights - what happened to fintech

Hi there, 

In 2021, funding to mental health tech companies reached $5.5B. A lot of much-needed innovation is occurring in the space.

But is it all good?

While researching the space recently, I came across this ad:

I was reminded of the Charlie Munger quote, “Show me the incentives, and I’ll show you the outcome.” 

While cringey, I ultimately did appreciate the copywriting of this “mental health” ad.

Why?

Cuz it was 100% clear.

No feel-good, mission-driven talk. 

No discussion of counseling or wellness.

Instead, it got to the core of what they do. 

You want meds?

They prescribe meds.

Notably, the same startup (and others) and their aggressive prescription tactics were discussed in an excellent WSJ piece by Rolfe Winkler and Joseph Walker. See The Blurb below.

For those that haven’t read Empire of Pain — about the Sackler family dynasty and the chronic pain epidemic they helped manufacture and then “solved” with opioids — I highly recommend it.  

Let’s see how this all turns out. Ya know — the whole "history doesn’t repeat but it often rhymes" thing.

State of Fintech

Fintech funding is down, but deals are up. 

Let’s dig in. 

Funding to fintech companies fell 18% quarter-over-quarter to $28.8B in Q1’22. At the same time, deals increased by 7% to hit a new record. 

In venture overall, fintech still represents $1 of every $5 invested.

Bottom line: Fintech funding is still going strong (it was the 4th largest quarter in history) riding a wave of smaller deals. The average fintech deal size in 2022 so far ($25M) is 22% smaller than in 2021 ($32M).

Meanwhile, M&A activity is up to record levels in Q1’22, with 257 fintech acquisitions.

High note: The quarter saw 5 fintech M&A deals worth $1B+. The top deal was Coinbase’s $2.2B acquisition of 2TM, owner of Mercado Bitcoin, Brazil’s largest crypto exchange.

Insurtech — which has taken a beating on the public market in the US — saw funding plummet in Q1’22. The category experienced the largest percentage drop (-58%) in funding for any fintech sector in the quarter. 

But deals held steady. For the biggest rounds of the quarter, investors went international: 7 of the top 10 insurtech deals went to companies based outside of the US.

More data than a CVS receipt

CVS Health, the $141B pharmacy giant, is reinforcing its hold on healthcare.

Beyond forging dozens of business partnerships in recent years, the company launched a $100M venture fund targeting early-stage health technology companies in 2021.

We mined CVS’ investments, acquisitions, and partnerships to uncover its strategic priorities, from health IT to virtual care.

Check out our analysis and see the full strategy map here.

Everyone works in technology now

With SaaS, cloud, and low-code/no-code, business folks increasingly are charged with making technology decisions (sorry, IT).

And so we’ve been thinking a lot about how to reduce friction for both buyers and sellers of technology.

At our Spring Product Launch next week, we’ll be walking through what our engineering and data science teams have been working on to reduce this friction, including:

• How you can analyze a vendor landscape in seconds

• How you can now connect with startups via 1 click

• How startups can increase their visibility with technology buyers (for free)

Request an invite to our product launch event here.

A wealth of information

Startups are changing the way retail and institutional investors manage wealth.

From employee financial wellness to crypto investing, startups are gaining momentum across the wealth tech landscape. 

We map out 110+ companies offering B2B and B2C wealth management solutions here. 

Bloomberg. John Tozzi (@jtozz) uses the CB Insights State of Digital Q1’22 Report to cover digital health funding trends.  

Protocol. Biz Carson (@bizcarson) discusses the startup post-mortem and cites CB Insights research.

TechCrunch. Anna Heim (@abracarioca) uses the CB Insights State of Venture Q1’22 Report to report on European funding trends.

Startups make it easy to get ADHD drugs. The Wall Street Journal’s Rolfe Winkler and Joseph Walker dig into the aggressive practices of some mental health startups.

How to write and think more clearly. Writing better is an absolutely phenomenal skill. This is a good, simple presentation with some tips on how to do that.