Funding to Institutional Investments and Trading companies look set to fall for a third year running

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fintech insurtech wealthtech regtech ai cybertech esg news

The first three quarters of 2017 saw only $518.2m of funding to Institutional Investments & Trading companies, 71% of the total investment in 2016.

  • Total investments in Institutional Investments & Trading companies increased at a CAGR of 40.9% between 2014 and 2016. In 2016 Institutional Investments & Trading companies received a total of $729.5m, 2.8% less than the total invested in 2015.
  • Investments to the subsector look set to fall further this year as the first three quarters of the year saw $232.8m worth of funding in deals under $100m, only 54.6% of the investment to this segment last year.
  • The number of deals closed to the sub-sector fell by 23% last year and only 69.7% of the total deals closed in 2016 were closed in the first three quarters of this year, putting deal activity on track for another decline.

Investments valued under $100m increased three fold QoQ in Q3 2017 after Q2 2017 saw the highest total funding since lufax closed their $1.2bn deal in Q1 2016

  • Investment valued under $100m hit a 5 quarter high in Q3 2016 with $161m committed to Institutional Investments and Trading companies, an increase of 17.4% YoY.
  • Over the last five quarters the number of investments have varied falling from a high of 26 in Q3 2016 to 12 in Q3 2017.
  • The last 5 quarters saw two deals valued over $100m. The Investment platform Addepar closed a $140m Series D deal on the 8th of June, followed less than a week later by a $145.5m Series C funding round to Hong Kong based Futu Securities.

The Share of deals to US based Institutional Investments and Trading companies has progressively declined since 2014 as more deals are closed in emerging markets

  • The Share of Investments to companies based in the USA fell by 9% between 2014 and 2016 and look set to fall again by the end of this year.
  • Canada and the United Kingdom have both seen the share of deals to Institutional Investments & Trading companies gradually increase between 2014-2016. Notably Canada has received 9% of deals closed in the first three quarters of this year, up from only 1% of deals in 2014. Most recently CoPower, a clean energy investment platform based in Montreal which offers earnings of up to 5% annually, received $2m of venture funding in July.
  • Other countries including but not limited to; Australia, Sweden, Singapore and Israel receive a combined total of around 25%of deals each year.

The Top 10 Investors Participated in 15.9% of all deals to the Sub-Sector between 2014 and Q3 2017

  • Over 300 Institutional and Angel Investors have participated in deals to Institutional Investments and Trading Platforms since 2014. 15.9% of deals to companies in this Sub-Sector included participation from the top ten investors, with the most active investor; Startupbootcamp participating in 3.3% of investments.
  • Nine of the top ten investors are based in the United States with the only remaining investor Startupbootcamp based in the UK.
  • Startupbootcamp’s investments include seed rounds to Risk Management Platform Adapt Ready and Trading Platform CFX Markets.

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