Many of us fondly remember when, just a handful of years ago, VC funding was abundant. It was a golden era in which startups competed for investor attention, valuations climbed quickly, and founders optimized for growth.
Fast forward five years, and the situation is much different. Venture funding has become much more selective, and while it often favors cutting-edge technologies such as AI and the blockchain, investors have much higher expectations than they did at the dawn of the decade, wanting to see proven traction much earlier. Between the changing economics and new technologies, it is clear that the fundraising environment for fintechs has evolved.
AI is reshaping where venture dollars go
By now, it’s no secret that AI-focused fintechs and ideas are garnering a lot of VC funding. According to CB Insights’ State of Venture 2025 report, AI startups raised $226 billion in 2025, a figure that represented 48% of all global venture funding. This doesn’t mean investors have lost interest in fintech. Instead, fintech companies are increasingly expected to demonstrate how AI strengthens their product, operations, or competitive moat.
All of this is happening while deal counts continue to decline and total venture funding has increased, suggesting that more money is flowing to fewer companies. In other words, fintech fundraising has become increasingly challenging. Generalist investors who previously backed broad fintech opportunities may now devote more attention to AI infrastructure and applications. Therefore, fintech founders need to explain not only why their business matters, but also how AI strengthens their competitive advantage.
Investors are rewarding efficiency more than growth
In 2021, many investors were myopically focused on growth. Today, it is clear that the “growth at all costs” mentality has ended as investors have shifted their focus to long term sustainability. Higher interest rates, a more disciplined venture market, and several years of valuation resets have encouraged investors to prioritize sustainable businesses over rapid expansion. Five years ago, investors used to focus on how fast a company can grow and today they are asking if companies can survive, scale responsibly, and solve a meaningful problem.
What is clear is that investors are looking for sustainable unit economics, realistic customer acquisition costs, recurring revenue, capital efficiency, and credible pathways to profitability. The question has shifted from “How quickly can this company grow?” to “Can this company build an enduring business?” In the fundraising environment of 2026, disciplined execution and financial resilience have become just as compelling as ballooning growth projections.
Relationships matter more than ever
In a world where funding is more competitive than ever, what’s the best move for a founder? Just as with enterprise sales, relationships, fit, and timing matter when it comes to fundraising. At a time when fewer companies are receiving funding, warm introductions and a precise founder-investor fit become the two elements that can make the difference between getting a meeting and getting funded.
Given this, the strongest approach for founders is to spend time building relationships before formally raising capital. Instead of pitching everyone, founders’ strategy looks like building credibility with the right investors.
What’s a founder to do?
None of these changes mean fundraising has become impossible. But they do mean that founders need a different playbook than they did just a few years ago.
That’s one reason Finovate launched the new IMPACT Funders & Founders event. As fundraising becomes more relationship-driven and investors become more selective, founders benefit from opportunities to meet qualified investors, hear directly from active VCs, and build connections before they need them most.
The good news is that capital will continue flowing to companies solving meaningful problems. The founders who understand and adapt to today’s investment landscape will be best positioned to secure it.
Finovate’s IMPACT Funders & Founders event takes place on September 11, 2026 in New York. Reserve your spot today and check out our blog coverage for more detail on what to expect.
For more founder-focused insights on the current market, check out a panel conversation from FinovateSpring where investors discussed where investment will continue, shared their thoughts on M&A expectations, and analyzed whether or not the bubble has already burst in fintech.
