Investment in fintech: venture capital, private equity, m&a and debt.

Investment in fintech: venture capital, private equity, m&a and debt.

Abstract:

This study analyzes the importance and evolution of investments made by Venture Capital, Private Equity, M&A and Private and Venture Debt in the fintech sector. It focuses on the last four years since a number of historical events have taken place, such as the crisis caused by the Covid-19 or the Ukraine War, which have had a great impact on the markets and, consequently, have affected investment in the sector.

In order to achieve a correct and cohesive exposition, an overview of the fintech sector is provided. In this regard, the fintech concept itself is introduced along with its essential elements and the objectives and challenges ahead. A brief historical contextualization is carried out and the invaluable contribution of these companies to goals determined by international organizations related to sustainability and the democratization of financial services is highlighted.

The conclusion reached is that investments made by Venture Capital have the most
significant impact on fintech industry due to the nature of these companies. As far as Private Equity investments are concerned, although they are not currently very relevant, it is expected that as the number of consolidated companies increases, they will do the same. Likewise, we see an intense activity in M&A transactions, and we expect these levels to remain stable or even to grow, provided that the macroeconomic environment allows it.

Finally, we note that investments in debt, whether Venture Debt or Private Debt, are not the most common in terms of fintech, since the lack of positive cash flows does not arouse the trust of investors, who require guarantees of solvency.

Keywords: Fintech, Venture Capital, Private Equity, M&A, Debt, Finance, Disruption, Technology, Startups.