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The US FinTech sector is bracing for a projected 6% decline in overall funding for 2025, primarily driven by a significant slowdown in large-scale investment rounds exceeding $100m. This cautious trend emerges as investors adopt a more selective approach, impacting deal volume and average transaction sizes.
Key US FinTech Investment Snapshot (Q1-Q3 2025):
- Overall US FinTech investment experienced a 7% year-over-year decrease.
- Based on the current pace, total deal funding is forecast to drop by 6% in 2025.
- Deals valued over $100m saw an 8% reduction, reflecting increased investor discernment.
- Despite the downturn, Cyera, an AI-driven data security FinTech, notably secured one of the largest deals with a $540m Series E round.
US FinTech Investment Dips 7% Year-over-Year
The first three quarters of 2025 revealed a notable slowdown in the US FinTech market. Compared to the same period in 2024, the sector witnessed a significant contraction in deal activity, alongside a moderate but clear dip in total funding.
Deal volume plummeted by 21%, reaching 1,230 transactions, a sharp fall from the 1,557 deals recorded in the initial nine months of the previous year. Concurrently, total funding decreased by 7%, settling at $35.9bn, down from $38.7bn over the same timeframe in 2024.
Interestingly, while the overall number of deals shrank, the average deal size expanded. It rose from $24.8m in Q1-Q3 2024 to $29.2m in Q1-Q3 2025. This indicates a strategic shift where available capital is being concentrated into fewer, yet individually larger, high-value transactions.
Projected 6% Funding Reduction for Full Year 2025
Extrapolating the investment trends from the first three quarters of 2025 across the entire year, total FinTech funding is anticipated to reach $47.9bn from an estimated 1,640 deals. This projection represents a 6% decline from the $51bn raised in 2024 and a 12% drop in deal volume compared to the 1,868 deals completed last year.
Under this forecast, the average deal size for 2025 is expected to maintain its elevated position relative to figures from 2024, further underscoring the trend of larger, but fewer, investments.
Selective Investors Drive 8% Drop in $100m+ Deals
Analysis of funding by deal size reinforces the cautious investment climate. In the first nine months of 2025, deals under $100m collectively amounted to $15.2bn, a modest 5% decrease from the $16.1bn recorded in the corresponding period of 2024. However, the larger transactions—those worth $100m or more—suffered a more significant blow, totaling $20.7bn, an 8% reduction from the $22.6bn seen a year prior.
Projecting these trends for the full year suggests that funding for deals under $100m would hover around $20.3bn, slightly above the $19.2bn seen in 2024. In stark contrast, funding from deals exceeding $100m is estimated to reach $27.6bn, marking a substantial 13% decline from the $31.8bn raised in 2024. These figures paint a clear picture of a market where smaller investment activities show comparative resilience, while substantial, large-scale funding rounds are noticeably contracting, signalling a recalibration of investor sentiment amidst evolving economic and regulatory landscapes.
Cyera Secures One of Quarter’s Largest Deals with $540m Series E for AI Data Security
Amidst the challenging funding environment, Cyera, a pioneering FinTech focused on AI-driven data security, successfully closed one of the most substantial deals of the first three quarters: a $540m Series E funding round. This impressive capital raise was spearheaded by prominent investors Georgian, Greenoaks, and Lightspeed Venture Partners.
Cyera’s platform is designed to empower enterprises to securely integrate generative AI and large language models by enabling organizations to effectively locate, classify, and protect sensitive data across their complex digital ecosystems. The company’s total funding now surpasses $1.3bn, with its valuation doubling to $6bn in less than four years since its inception.
The fresh capital infusion is earmarked for strategic initiatives, including enhancing Cyera’s product suite, pursuing key acquisitions, and expanding its global footprint to meet the escalating demand for secure AI deployment solutions. With a remarkable 4.5x year-over-year increase in its Fortune 500 customer base, the recent acquisition of Trail Security to launch Omni DLP, and operations spanning 10 countries with nearly 800 employees, Cyera is firmly positioning itself at the forefront of responsible, enterprise-grade AI adoption.
Source: fintech.global