The average FinTech seed deal in the DACH region drops 17% in H1 2023 YoY

Key DACH FinTech seed investment stats in H1 2023:
• DACH FinTech seed deal activity reached 91 transactions in H1 2023, a 47% drop YoY
• The average FinTech seed deal in the DACH region during the first six months of 2023 was $2.3m, a 17% drop compared to the same period last year
• Germany was the most active country for FinTech seed deals in the DACH region during H1 2023 with a 60% share of all transactions.

The DACH region has seen a drop in support for early stage FinTech companies with seed deal activity dropping significantly during the first six months of 2023 compared to the previous year. In the first half of 2023, there were 91 seed deals in the DACH FinTech sector, marking a significant 47% decrease compared to the previous year. During H1 2023, the DACH region saw the average FinTech seed deal decrease to $2.3m, a 17% decline when compared to the figures from the same period last year.

Payrails, a payment infrastructure provider, had the largest FinTech seed deal in Q2 2023, raising $14.4m to extend their seed deal funding round, led by EQT Ventures. In total Payrails has raised $20.8m in their seed round. Payrails will use the funding it received to advance its product development and implement its go-to-market strategy. By leveraging local payment methods and routing transactions to multiple processors in over 200 countries, early customers have already improved their payment processes, resulting in cost savings and higher authorization rates. Payrails has developed an end-to-end payment processing operating system to improve the highly fragmented payments process space for platforms, marketplaces and large enterprises. The founding team recognized the gap in the market and is addressing the global digital payments market, which is expected to grow to 3.3 trillion by 2031. USD. With Payrails, companies can process international payment transactions across multiple processors without having to build internal structures.

Germany was the most active FinTech seed country in the DACH region during H1 2023 with 55 deals, a 60% share of deals. Switzerland was second with 31 FinTech seed deals, a 34% share of deals and Austria was third with 5 deals.

RegTech was the most active DACH FinTech subsector for seed deals in H1 2023 with 20 deals, a 22% share of total deals and PayTech was second with 19 deals, a 20% share of deals. According to NGP Capital, DACH-based generative AI startups attracted more funding ($248M) in Q2 2023 than they did during the whole of 2022 ($210M).

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