Hey fintech friends,

Retail platforms are racing to launch prediction markets. Prediction markets want to become derivatives exchanges. Agentic payments infrastructure stack is splitting into two distinct stacks, and everything is going on-chain.

Let’s break down where capital flowed in Q2, what launched, who exited, and what it all signals for players across the financial industry. 

For new readers, Signals is the premium subscriber edition of TWIF designed to get you away from the headlines and to explore the larger trend lines. Each quarter, we break down four key questions on fintech activity:

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Total fintech funding rose 23% from the prior quarter to $12.6 billion in Q2 (a 47% jump Year-over-Year), fueled by a number of growth-stage (Series C-Series G) megarounds. The total number of equity raises was down 18% QoQ (-12% YoY), bringing average deal size up 50% QoQ (+61% YoY).

A small handful of fintechs went public: Indian InsurTech Turtlemint went public in a $477M IPO; Teamshares– a tech-first acquirer of small businesses that gives SME employees ownership in their company’s stock– completed a $325M SPAC. Meanwhile, Wise transferred its primary listing from the London Stock Exchange with a ~$15.5B debut on NASDAQ.

While the IPO environment has been sluggish, fintech funding is slowly recovering from mid-2023 lows– particularly to category leaders in banking, cross-border payments, investment infrastructure, and DeFi operators successfully integrating AI and/or tokenization in regulated financial workflows.