The WealthTech sector saw $541m-worth of funding across 116 investments in the second quarter of the year
- The 116 WealthTech deals in Q2 2017 was a record for the subsector. Q4 2016 remained the biggest quarter of the period for total investment with $753.5m-worth of funding.
- 2017’s second quarter saw WealthTech grow in both overall investment and deal activity when compared with Q1 2017. A QoQ rise of 26.5% and 78.5% occurred in the total investment and number of deals, respectively.
- Q2 2017’s largest deal was received by Palo Alto-based Robinhood. The retail stock trading firm’s $110m Series C funding round was three-times larger than the second-biggest deal in the period. The round was led by DST Global with NEA, Thrive Capital, Ribbit Capital, Index Ventures, and Greenoaks Capital participating as co-investors.
WealthTech deal activity in 2017 is on track to surpass last year’s record levels
- The first half of 2017 has already seen more deals and more funding than the whole of 2014. The first two quarters of the year had 181 deals, one extra than 2014’s, and over $30m additional funding.
- The 181 deals that took place in H1 2017 is already at over two-thirds of the total seen in the whole of last year, which was a record year for the sector.
- The average deal size for H1 2017 was $5.4m, just above the lowest yearly average in the period of $5.2m seen in 2014. H1 2017’s average is 37.2% lower than last year’s, making this year’s chances of becoming another record-breaking year less likely. The largest WealthTech investment of 2016 was received by Shanghai-based U51.com, in a $310m Series C round. The U51.com deal is almost three-times higher than the single-largest deal of this year so far, meaning so far deals have been more frequent than last year, but smaller in size.
Over half of the WealthTech deals in Q2 2017 went to Personal Finance companies
- 4% of the WealthTech deals in Q2 2017 went to firms focused on Personal Finance. This percentage is over double the share of the second largest sector for deals – Retail Investing & Trading.
- Personal Finance received just under a third of the investment total, an amount equivalent to $173.1m, despite seeing over half of the total investments. Despite changes in their values, the rankings of each of the subsectors, whether it be either share of deals or funding, remained the same.
- The largest Personal Finance deal of the quarter came in mid-May for Chinese firm Wacai, creator of a personal finance management app that provides both bookkeeping and mutual fund trading services, which received $42.0m in an undisclosed round led by China Development Bank Capital.
Q2 2017 sees Online Banking maintains its status as the WealthTech sector to have received the largest total funding in 2017
- Online Banking’s investment share fell 22.1% after the introduction of Q2 2017’s figures, falling to just under 31% after a dominant Q1 saw its share rise to over 50%.
- In the opening half of 2017 Retail Investing & Trading firms’ funding has had its share of funding rise to nearly a quarter of the overall, after a YoY fall in the 2014-2016 period.
- Personal Finance’s growth YoY during the 2014-2016 period saw the sector’s share of funding almost double, from 20.7% in 2014 to 37.4% in 2016. In 2017 thus far however, that value has receded to just above a quarter in a fall of over 10%.
North American WealthTech investment exceeds Europe’s in Q2 2017
- Q2 2017 was a strong quarter for North America-based WealthTech companies. The region received nearly a quarter of a billion dollars in funding and overtook Europe, after Europe led the way in Q1.
- Asia’s $100.4m total again saw it follow suit from Q1 as the region to receive the lowest total. Asia’s meagre $160.1m in WealthTech funding thus far is just under $25m more than what it received in the same period in 2016, but a massive decrease in 2016 Q3 and Q4’s figures.
- North America’s largest WealthTech deal of Q2 went to the Retail Investing & Trading firm Robinhood – the largest deal of the quarter.