According to Bloomberg Business, global venture funding for fintech firms finally rose in 2025, climbing 25% to $55.94 billion after a four-year decline. The surge was dominated by prediction market platforms, with Polymarket and Kalshi Inc. accounting for a staggering $3.71 billion of that total. Polymarket raised $2 billion in October at a $9 billion valuation, while Kalshi raised $1.3 billion across two rounds, hitting an $11 billion valuation. The number of deals actually fell by 19%, showing money is concentrating in fewer companies. Other winners included Ramp Inc., which raised about $1 billion across three rounds and saw its valuation soar to $32 billion. This shift comes amid a more relaxed regulatory environment under the Trump administration, which is helping fintech and crypto firms land traditional banking clients.
The Winner-Take-All Reality
Here’s the thing: this isn’t a broad-based recovery. It’s a consolidation. The data shows fewer companies getting much, much bigger checks. As Matt Streisfeld from Oak HC/FT put it, investors are “doubling down on the perceived market winners.” Why fund ten new expense management startups when you can pile another billion into Ramp? That mentality explains the eye-popping rounds for Polymarket and Kalshi. They’re not just fintech; they’re riding the blurry line between financial speculation and online gambling, and right now, that’s where the hype (and regulatory easing) is creating massive perceived winners. It’s a bet on a specific, hot niche, not a vote of confidence in the entire sector.
Regulation, The New Growth Hack
And a huge part of this story is the regulatory thaw. For years, fintech and crypto firms banged their heads against a wall of banking compliance. Now, under the current administration, that wall seems to have a few new doors. Look at Coinbase landing partnerships with Citigroup and PNC. That was almost unthinkable a few years ago. This easier environment isn’t just about operating; it’s fueling exits. 2025 saw a wave of crypto and fintech IPOs from companies like Circle and Klarna, giving VCs a path to finally cash out. The promise of more IPOs in 2026 is like a magnet pulling more late-stage money into the sector. Basically, the government shifted the rules, and the money followed.
A Different Kind of Craze
So, is this 2021 all over again? Not exactly. Streisfeld makes a key distinction. The 2021 frenzy was about funding projected growth at unsustainable rates—money went to marketing blitzes and user acquisition at any cost. The 2025 version, while still featuring huge sums, seems more focused on scaling already-proven commercial adoption and banking on regulatory tailwinds. The risk is just as high, but the narrative is different. It’s less “this could be huge” and more “the gates are open, and this company is already through them.” But let’s be real: valuations jumping from $13 billion to $32 billion in a year, or prediction markets hitting $11 billion valuations, still smells pretty frothy. The question is whether this is sustainable growth or just a different flavor of bubble.
