Despite fintech funding hitting pandemic-era lows in 2024, venture capitalists remain bullish on one sector: AI-powered financial technology. According to a comprehensive survey of dozens of top VCs conducted by Business Insider, nearly one-quarter of the most promising fintech startups are leveraging artificial intelligence as a core component of their offerings.
The investment landscape for fintech is expected to improve in 2025, with softening antitrust scrutiny potentially opening VC pocketbooks. AI applications are disrupting virtually every corner of finance, from banking and investing to saving and workplace operations.
The 15 startups highlighted span both B2B and consumer-facing applications. Business-focused companies include BeatBread, which uses AI to analyze and predict revenue potential in the music industry, having raised over $150 million. Noetica ($7.85M raised) helps deal professionals negotiate debt agreements using AI-powered benchmarking of corporate debt transactions. Materia AI ($6.3M) assists accountants in organizing data and automating workflows, addressing the declining number of new auditors entering the profession.
Compliance and risk management represent significant opportunities, with Greenlite ($4.8M) automating compliance processes for fintechs and banks, while Coris ($3.7M) manages risk and fraud for SMB clients. Brico ($8.1M) uses AI to automate financial licensing applications and renewals across all 50 states, addressing what investors describe as “a very manual and expensive process.”
Consumer-facing innovations include Clerkie ($41M raised), which embeds AI debt-automation software in banking apps to help consumers manage debt repayment. Cascading AI ($4.1M) offers loan-origination software with integrated AI assistants that enable 24/7, 365 banking support, addressing the mismatch between customer needs and traditional banking hours.
Treasury and financial operations are also being transformed. Nilus ($8.6M) provides AI-powered cash and treasury management for fintechs and financial firms, while Iris Finance ($3.5M) offers consumer companies an “AI-powered CFO-in-a-box” that complements rather than replaces existing tools like QuickBooks. Fintary ($2.5M) has grown more than 10x since its pre-seed investment, automating finance and accounting for insurance companies.
All featured startups have raised no more than a Series C, representing a mix of investors’ portfolio companies and independent selections, demonstrating genuine market conviction in AI’s transformative potential for financial services.
Key Quotes
Customers do not operate on the 9-to-5, Monday-to-Friday schedules that banks do. When a pizzeria’s oven breaks, the owner is inquiring about a loan after closing shop.
Laura Bock, partner at QED Investors, explained why Cascading AI’s 24/7 AI-powered loan assistance represents a fundamental improvement over traditional banking, highlighting the disconnect between customer needs and banking availability that AI can solve.
While the notion of AI bookkeeping is very much in vogue today, replacing Quickbooks is hard — and not something most brands or outsourced accountants are looking to do in the near term.
Redpoint’s Clark articulated why Iris Finance’s complementary approach to existing tools may be more successful than replacement strategies, revealing important insights about AI adoption patterns in established markets.
With a decline in new auditors and an immense volume of manual data entry, professional-service audits are the perfect place for an AI copilot.
Alysaa Co, principal at Bain Capital Ventures, explained why Materia AI addresses a critical workforce shortage, demonstrating how AI can solve labor market challenges while enhancing rather than simply replacing human workers.
Aggregating unstructured data on SMBs to generate insights at scale is challenging. Coris is at the forefront, leveraging a variety of methods across LLMs, ML, and good old-fashioned software.
Charley Ma from Pathlight Ventures highlighted how Coris combines multiple AI approaches to solve the complex problem of SMB risk assessment, illustrating the sophisticated technical strategies required for effective AI implementation in finance.
Our Take
This VC consensus reveals a maturation of AI in fintech beyond hype toward solving specific, high-value problems. Notably, the most promising startups aren’t attempting wholesale replacement of established systems but rather augmenting existing workflows—a pragmatic approach that reduces adoption friction.
The concentration in compliance, risk management, and accounting reflects AI’s strength in handling unstructured data and repetitive processes, while the emphasis on “copilot” language suggests VCs have learned from earlier automation failures that ignored human expertise.
Particularly striking is the diversity of funding stages and amounts—from $2.5M to over $150M—indicating AI fintech opportunities exist across the maturity spectrum. The strong performance of pre-seed companies like Fintary (10x growth) suggests rapid market acceptance.
The timing is significant: as traditional fintech funding contracts, AI-powered solutions are capturing disproportionate attention, potentially creating a flight-to-quality dynamic that could accelerate consolidation around AI-enabled platforms and leave traditional fintech players vulnerable to disruption.
Why This Matters
This comprehensive VC survey reveals AI’s central role in fintech’s next growth phase, even as overall sector funding remains depressed. The concentration of AI startups among top VC picks signals a fundamental shift in how financial services will operate, with implications across multiple dimensions.
For businesses, these AI solutions promise dramatic efficiency gains in traditionally manual, time-intensive processes like compliance, accounting, and deal negotiation. The automation of tasks previously requiring specialized expertise could democratize access to sophisticated financial services.
For workers, particularly in accounting, compliance, and banking operations, these technologies represent both opportunity and disruption. While AI copilots may enhance productivity, they also signal workforce transformation in financial services professions.
The 24/7 availability enabled by AI assistants addresses a fundamental mismatch between customer needs and traditional banking hours, potentially reshaping customer expectations across financial services. The diversity of applications—from music industry financing to SMB fraud detection—demonstrates AI’s versatility in solving domain-specific financial challenges.
Most significantly, the strong VC conviction despite broader funding challenges suggests AI-powered fintech may be recession-resistant, attracting capital even in difficult markets and potentially accelerating adoption as companies seek efficiency gains.
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