WealthTech investors back more startups as funding declines

The figures point to a changing investment landscape. Average deal sizes fell to $8.7 million, down 45% year-on-year, suggesting investors are spreading capital across a broader range of companies rather than concentrating funding into a smaller number of large transactions.

If current trends continue, the sector is on track to raise around $3 billion across 346 deals in 2026. This would represent a 15% decline in annual funding compared with 2025 but a 34% increase in deal activity, indicating that market momentum is being driven by startup participation rather than larger funding rounds.

The funding doubled Vestwell’s valuation from its 2023 Series D round and increased total capital raised to $660 million. The company, which serves more than two million savers and manages over $50 billion in assets, plans to use the proceeds to expand distribution across payroll and benefits platforms, develop AI-powered capabilities and broaden its savings offerings beyond retirement products.

Overall, H1 2026 data suggests investor confidence in WealthTech innovation remains intact, although capital deployment has become more measured. The combination of rising deal activity and shrinking average cheque sizes indicates a market increasingly focused on diversification, efficiency and long-term growth opportunities.