??? The State of Venture Capital in 2022

Good morning, crunchers!

As fintech continues to be a driving force in the financial industry, venture capital plays a huge role in helping startups reach their full potential.

With that in mind, it's important to stay up-to-date on the funding winter we are all experiencing - not just for fintech but for the wider startup ecosystem.

If you're new here, Couchonomics Crunch is where I bring you weekly updates every Wednesday from the world of fintech, web3, crypto, defi, and investments.

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Now let's dive right in.

?? What’s New in Fintech & Payments

• UAE: The UAE is introducing governance and legislation of Virtual Assets with a new Cabinet Resolution.

• India: India's central bank is in consultations with Moscow on a rupee-rouble trade arrangement that would enable exports to Russia to continue after western sanctions.

• BNPL: Allianz Trade, Santander Corporate and Investment Banking, and Two have come together to create an innovative B2B BNPL solution for large multinational companies.

• Al Fardan Ventures and Canaan Advisors are partnering to create a blockchain-based real estate investment platform in the Middle East and African markets.

• Global payments company Flutterwave wants to acquire Railsr, a fintech company based in the UK.

?? The World of Web3

• The NFT craze has significantly cooled down from what it was, but there are still some ideas out there of how NFTs could revolutionize our lives.

• Venom Foundation and Iceberg Capital have joined forces to fund Web3 and blockchain startups with a massive $1 billion investment.

• Companies in UAE offer competitive salaries for specialized metaverse roles such as game design and traffic management, with pay rates reaching up to Dh30,000 per month.

?? Crypto & Defi

• Binance revealed flaws in its system that resulted in a $1 billion shortfall for the company’s stablecoin BUSD.

• Coinbase announced that it’s laying off around 20% of its staff to cut costs.

• Cryptocurrency trading is entering an exciting chapter. UAE’s initial federal regulations ensure that virtual assets are now governed by this regulatory regime. Legal professionals discussed how these changes will affect traders and overall operations within the space moving forward.

?? The State of Investment

• InvestSky, a social investing platform based in the UAE, has launched after receiving $3.4 million from Emkan Capital.

• Despite various economic worries, start-ups in the Middle East, Africa, Pakistan, and Turkey managed to secure a total of $7.2 billion through 1,473 deals last year.

• Catalyst Fund is investing $2 million to support 10 startups dedicated to helping Africa adapt to climate change.

?? The State of Venture Capital in 2022

Venture capital has become an integral part of the financial technology industry, with billions of dollars being invested every year into fintech startups and innovative projects. Let's take a look at the key trends shaping venture capital today.

??US venture funding hit $198.4B in 2022 — down 37% from 2021, but up 31% when compared to 2020. Deals to US-based startups dropped 7% YoY to reach 12,141.

??Global IPO count dropped by 31% in 2022 to 716. M&A deals also took a hit, dropping by 8% to 10,037. SPAC deals saw the largest drop among exit types in 2022, falling by 44% from their peak in 2021 (140) to 78.

??Unicorn births steadily declined throughout 2022, sinking to a low of 19 new unicorns in Q4’22 — an 86% drop compared to Q4’21.

??$100M+ mega-rounds collectively accounted for $190.1B in funding in 2022, marking a 49% drop from 2021. The number of global mega-rounds dropped by 42% to 923 in 2022.

??Digital health funding saw the sharpest YoY drop among sectors analyzed, falling by 57% to hit $25.9B across 2,122 deals in 2022. Digital health was the only sector where both funding and deals in 2022 dropped below 2020 levels.

??Fintech funding also continued to contract. Fintech companies raised $10.7B across 972 deals in Q4’22, marking an 18% drop QoQ and a 16-quarter low.

??Africa-based companies raised $991M in Q4’22 — a 164% jump QoQ. On an annual basis, Africa drew $3.1B in funding in 2022 — a new annual record for the continent.

?? Report of the Week

Fintech Access Guide Version 3.0: An excellent resource from the Fintech Saudi team for Founders (both local and international) on how to navigate the early stages of establishing and growing a fintech startup in the Kingdom of Saudi Arabia. Check the full report here.

?? Books I’d like to Recommend

Humor, Seriously: Why Humor Is a Secret Weapon in Business and Life by Jennifer Aaker and Naomi Bagdonas

Check out more of my favorite reads here.

?? In Other News…

• Delivery: FedEx is taking additional steps back on Sunday package deliveries due to decreased e-commerce demand.

• AI: Could AI soon be replacing creative workers such as writers, translators, and artists?

• Technology: From CRISPR technology that promises to revolutionize cholesterol management, to advanced AI — this year’s top 10 breakthrough technologies are sure to make a lasting impact.

• Business: A Forbes 30-Under-30 winner is accused of deceiving JP Morgan into purchasing an educational tech startup for $175 million by fabricating millions of fake users.?

• Travel: Louis Vuitton is taking experiential retail to the next level with LV Dream — the first Louis Vuitton Hotel.

?? The Podcast for Fintech Enthusiasts

Couchonomics is back! For our inaugural episode of Season 2 we're examining the BNPL model with Mr. BNPL himself, Hosam Arab , Co-Founder and CEO of Tabby.

??? And that brings us to the end of today’s Crunch

If you enjoyed today's edition of the Couchonomics Crunch, be sure to share it with all the other fintech enthusiasts you know.?

Are you an early-stage startup* founder? Grab a chance to be a guest on Season 2 of Couchonomics. The startups have to be from the MENA region and associated with the rapidly changing world of financial services.

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And thank you to our sponsors Adyen, ToYou, Visa, Geidea, and M2P Fintech for making today's edition possible.