Fintech is the most invested sector for Sequoia and Andreessen Horowitz.

Despite the worldwide slump, Sequoia has been active overall last year, with over 100 investments. Fintech accounted for approximately a quarter of the firm's transactions.

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We saw a similar pattern at a16z. According to Trade Algo, over a quarter of the 206 acquisitions in which a16z participated last year went to fintech startups – more than any other industry. Sixty percent of these fintech investments were completed in the first half of 2022, with the remaining completed in the second half of the year.

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Last year, Sequoia invested in 25 financial services businesses. According to Trade Algo, its top three fintech targets were capital markets, payments, payroll, and benefits, with each sector accounting for 16% of its investments.

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A16z financed 49 fintech businesses last year, with payments (28%), blockchain (22%), and digital lending (12%) being its top three fintech objectives.

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Three of Sequoia's four capital markets projects were follow-on investments, reflecting the firm's "belief in the future of capital markets tech," according to CB Insights. Citadel Securities' $1.2 billion round, Capitolis' $110 million Series D, Watershed's $70 million Series B, and Ledgy's $22 million Series B were among the transactions in which it participated.

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The payments sector received more than a quarter (28%) of a16z's fintech investments in 2022. For instance, it took part in the $300 million Series F of SpotOn, the $180 million Series C of Jeeves, and the $80 million Series C of Tally Technologies.

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Buy now, pay later (BNPL), expenditure management, peer-to-peer (P2P) payments, and online payment acceptance are the four primary industries that are covered by Sequoia's investments in payments tech businesses. The seed stage is where two of the four transactions are. Sequoia specifically took part in the $800 million funding round for Klarna, the $80 million Series B investment for Yokoy, the $20 million seed round for Telda, and the $4 million seed round for Cococart.

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While blockchain and crypto are arguably fintech, I usually leave that research to our crypto team, so I won't dive into a16z's blockchain investments. Yet a16z's third most popular fintech sector in 2022 was digital lending firms, with the company having invested in Point Digital Finance's $115 million Series C, Valon's $60 million Series B, and Vesta's $30 million Series A.

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Payroll and benefits were Sequoia's third most favored sector, with the company backing four such businesses — all at later stages — and investing in CaptivateIQ's $100 million Series C, Rippling's $250 million Series D, Remote's $300 million Series C, and Truework's $50 million Series C.

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