The fintech sector continues to show resilience and evolution, with CB Insights’ State of Fintech Q2’25 Report revealing steady funding of $10.5 billion in the second quarter of 2025. This marks the second consecutive quarter surpassing $10 billion, a milestone not seen since early 2023. While funding remains below the peaks of 2022, the report highlights a sector in recovery, driven by strategic investments in mature companies and a growing focus on B2B solutions and artificial intelligence (AI). Despite a 7% decline in deal volume to 804 deals, the data points to a maturing market where investors are prioritizing larger, later-stage bets over early-stage ventures. The fintech ecosystem in Q2 2025 was shaped significantly by mega-rounds, which accounted for 40% of total funding dollars in both Q1 and Q2. The largest deal of the quarter went to fintech infrastructure leader Plaid, which secured $575 million from new investors BlackRock, Fidelity, and Franklin Templeton, alongside existing backers New Enterprise Associates and Ribbit Capital. However, Plaid's valuation dropped to $6.1 billion, half its 2021 Series D valuation, reflecting a broader correction in tech valuations. This trend underscores investor caution amid stabilizing interest rates and improved market conditions, with a clear preference for mid-to-late-stage fintechs that demonstrate scalability and established market presence. Geographically, the United States continues to dominate, capturing 60% of global fintech investment dollars and 43% of deals, both record highs. This concentration is driven by the U.S.’s mature financial infrastructure, which supports scaling operations. Meanwhile, the proportion of early-stage deals across most fintech subsectors—except digital lending—dropped from 72% to 66% in 2025 year-to-date, signaling a shift toward funding companies with proven track records. Median and average deal sizes also rose, further emphasizing investor focus on high-conviction investments in established markets. The report highlights a surge in B2B-focused fintechs, which are scaling rapidly to meet demand for digitized financial operations. Companies like Ramp and Mercury exemplify this trend, with Ramp nearly doubling its headcount over the past year and Mercury boosting its valuation through a $300 million Series C round in March 2025. Both companies have introduced new enterprise features, such as treasury offerings with same-day liquidity, positioning them to capture significant B2B market share. This shift reflects a broader market need for financial software solutions that deliver clear returns on investment through operational efficiencies, particularly as businesses accelerate digital transformation post-pandemic. AI is another key driver of fintech innovation, particularly in wealth tech. Investors are increasingly drawn to AI-driven solutions that enhance portfolio management, making investment services more scalable and accessible. Notable examples include Altruist’s acquisition of AI assistant Thyme to better serve financial advisors, Stash’s $146 million round to bolster its AI-powered Money Coach platform, and Addepar's acquisition of AI workflow platform Arcus. Half of the top 10 wealth tech companies, as ranked by CB Insights’ Mosaic score, have integrated AI tools or made AI-related investments in 2025, underscoring AI’s transformative potential in the sector. Mergers and acquisitions (M&A) in fintech rose to 205 deals in Q2 2025, continuing an upward trend from Q4 2024. Blockchain companies were particularly prominent, securing two of the quarter’s most significant M&A deals. However, fintech lags behind other sectors in the broader venture capital recovery, where quarterly funding has exceeded $90 billion for three consecutive quarters, a level not seen since 2022. Fintech’s modest funding growth suggests that while the sector is stabilizing, it faces unique challenges, including compressed exit valuations—$1.1 million per employee since 2023 compared to $1.3 million across venture capital in 2024. The State of Fintech Q2’25 report from CB Insights paints a picture of a sector navigating a complex recovery. While funding stability and a focus on mature, B2B, and AI-driven companies signal optimism, the decline in early-stage deals and compressed valuations highlight ongoing challenges. As investors continue to prioritize larger, seemingly higher-conviction bets, the fintech ecosystem is potentially poised for a growth phase, driven by digital transformation and technological breakthroughs.