Fintech often evaluates itself through forward-looking thinking—as does much of the tech sector. It’s important to treat mistakes and failures as lessons, this thinking goes, and apply them to the next mission, rather than abandon the sector altogether or move to new development and investment structures.

Coupled with the accelerated nature of venture-backed economics, it’s easy for a privately funded fintech to sink and go defunct without making much of a splash. Plastiq’s bankruptcy, for example, came and went; insiders reflected relatively little on the news, despite the more than $225M poured into the lending and payments solution.

Granted, especially among VCs, there’s been growing acknowledgment that fundamentals should matter as much—if not more—than growth rates. But it’s seemingly paled in comparison to discussions surrounding new technologies, such as generative AI, which, the New York Times suggests, has meant that discussions of any systemic failure among tech companies has been “masked by a boom in companies focused on artificial intelligence.”

This is not to say that tech investors and entrepreneurs have fully glossed over the state of things. Key players have kept their eyes peeled on macro rates, bank collapses, consumer sentiment, and other core indicators to chart a path forward. Rather, the issue is that the scale and quantity of failure has been underappreciated and underdiscussed, leaving investors and entrepreneurs underinformed about the appropriate path forward.

The Times piece uses data from PitchBook and Carta to quantify the scale of the contagion. PitchBook estimated that 3,200 private-venture-backed companies went bankrupt in 2023, which had collectively raised more than $27B in venture funding. Carta, meanwhile, said 87 startup clients that had raised more than $10M went defunct in 2023, which was double the amount from the year prior.

These indexes certainly depict a less-than-rosy picture: one that resonates with general qualitative evaluations on the state of things. It also justifies further investment in scavengers like SimpleClosure and Unsellable, which saw mass failures—bankruptcies and tanking NFT values, respectively—as pathways to growth.

Granted, solutions predicated on the death of other companies and products may face their own demise, too, especially if things are on the upswing once more. But failure will always exist, suggesting this niche will continue to grow as entrepreneurs mint more fintechs in the coming years.