Despite Market Challenges, Fintech Still Attracts Venture Capital


Financial technology (fintech) has been caught up in the sell-off in the tech sector amid inflation fears, but the space is still attracting venture capital. This should create an ideal growth game for fintech, making exchange-traded funds (ETFs) like the Global X FinTech ETF (FINX) worth watching.

“Despite the current market turmoil and crypto market crash, long-term transformational trends in the fintech industry such as mobile trading apps and digitized financial services have continued to attract strong investment. in venture capital in 2022,” notes a PitchBook article.

“Fintech startups raised $53.5 billion in VC funding in the first half of the year, lagging the pace of 2021 but already topping 2020 totals, according to data from PitchBook,” add the item.

Some aspects of fintech are generating interest, according to PitchBook. For example, decentralized finance and autonomous finance are building on the strength they have seen during the pandemic.

“While some areas of fintech, such as neobanks and home lending platforms, are maturing and attracting more late-stage capital, other areas, such as decentralized finance and autonomous finance, are coming along. just starting to raise institutional capital at an early stage, according to PitchBook. Q2 2022 Fintech Report“, added PitchBook.

High growth potential in Fintech

With fintech opportunities diminishing in the first half of 2022, there are potential value plays available in the space. Rather than owning various fintech-focused companies, FINX can be an all-in-one solution for investors.

FINX seeks to provide investment results that correspond to the Indxx Global Fintech Thematic Index. The index is designed to provide exposure to publicly traded companies in developed markets that provide financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) lending and market, financial analysis software and alternative currencies, as defined by the index provider.

The fund offers investors exposure to:

  • High growth potential: FINX enables investors to access high growth potential through companies that apply technological innovations to disrupt and improve the delivery of financial services.
  • An unconstrained approach: The composition of the fund transcends traditional sector, industry and geographic classifications by following an emerging theme.
  • Efficiency of ETFs: In a single trade, FINX offers access to dozens of companies with strong exposure to the fintech theme.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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