The largest deal last year, $14bn raised by Ant Financial, made up 68.4% of the total value invested
- In 2018, FinTech companies based in China raised $20.5bn across 55 deals. The amount invested was 6.6 times larger than in 2017. Even excluding the previously mentioned Ant Financial deal, which is the biggest FinTech deal recorded globally, the capital raised is nearly twice the previous year level.
- The largest deal this year in China was the Ant Financial funding round. The FinTech conglomerate raised $14bn in private equity funding. In December last year, Ant Financial started talks to buy London-based foreign exchange specialists World First for $700m. This takes place after the company failed attempt to purchase US money transfer service MoneyGram. This activity is seen as an attempt in Ant Financial mission to expand its Mobile payments platform, Alipay, internationally.
- The second largest deal to close last year was SenseTime $1bn Series D round. The unicorn has developed range of AI technologies including face recognition, image recognition, medical image analysis and autonomous driving. This month it has announced the opening of a self-driving facility in Japan, for the R&D of its autonomous driving technology.
- There were 21.4% fewer deals in 2018 than the previous year. This decrease was much greater than the 4.1% drop in deal activity from 2016 to 2017.
FinTech investment in China slowed down in Q4 2018
- Last quarter China-based FinTech companies raised $257.4m across five deals. Total value was 81.6% lower compared with the corresponding quarter in 2017.
- The largest deal in Q4 2018 was $22m raised by Linklogis. The company uses big data and blockchain technology to find solutions for supply chain financial challenges of small and micro businesses.
- The second quarter last year saw the most capital raised, $17.1bn, which makes up 83.4% of the total amount invested last year. Four out of the five biggest deals in 2018 were completed in this quarter. Including two deals raised by previously mentioned Beijing-based unicorn, Sensetime, totalling $1.2bn. Infact, in 2018 the company completed three deals which collectively raised over $2bn.
- Deal activity was also highest in Q2 2018. There were 21 deals which constituted 38.2% of total deals for the year.
FinTech companies in the Marketplace Lending sector have attracted almost 30% of deals over the last five years
- Over 90 deals have been completed in the Marketplace Lending sector in China since 2014. The biggest deal this year in this sector was $359.3m raised by CGTZ in a Series D round. The funding round for the FinTech platform was led by Shanghai-listed Geo-Jade Petroleum, a Chinese real estate development and oil exploration and production company.
- Companies in the second most popular subsector, Payments & Remittances, are responsible for 15% of deals since 2014. These transactions include the previously mentioned Ant Financial funding round. The second largest transaction to close in Payments & Remittances this year was $160.3m raised by Weimob in a Series D round. The company is the largest provider of WeChat solutions for SMEs in China. At the end of 2018 it filed for an IPO on the Hong Kong stock exchange.
- The WealthTech and Data & Analytics subsector have received a healthy proportion of deals, 12% each. The two largest deals in the Data & Analytics subsector this year each raised $160.0m. The first was raised in a Series D round by Beijing-based Wecash. The company uses big data and machine learning for fraud prevention and credit scoring. The other was 100Credit Series C round. 100Credit also uses big data to provide credit services and was backed in its latest round by VC firm Sequoia Capital China.
- The Other subsector, which makes up 6% of deal activity, is comprised of the Cryptocurrencies, Blockchain, RegTech and Funding Platform subsectors. In 2018, the three largest deals in this subsector this year were all raised by the previously mentioned SenseTime. These three rounds together are responsible for 77.2% of the capital raised in the Other sector last year.
Share of deals raised by Chinese FinTech companies as a proportion of the total number of deals in Asia has decreased by more than 10 percentage points (pp) in the last five years
- Share of deals completed by Chinese FinTech companies as a proportion of total number of deals in Asia has been decreasing 2.3 pp on average each year since 2014.
- At the same time, deal activity of India-based FinTech startups has been increasing on average 1.8% pp per year.
- Adding to this, the percentage of deals in the Rest of Asia has stayed just under 50% for the past five years. This is a positive sign signalling the consistent FinTech landscape in other Asian countries.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ?2019 FinTech Global
