The first three quarters of this year saw $28.7bn committed to FinTech companies globally, 95% of last year total
- The total amount invested in global FinTech deals increased at a CAGR of 14.6% between 2014 and 2016 as 2016 saw almost $30bn invested in FinTech companies around the world.
- With over 95% of last year total funding invested in the first three quarters of this year, 2017 looks set to be a record year for funding. Despite this deal numbers seem to have plateaued since 2015 with the total number of deals set to fall short of the numbers closed last year.
- The largest deals of 2017 so far have largely been to Asian companies. E-commerce platforms Tokopedia and Flipkart and Point of sale provider One97 Communications all raised rounds more than $1bn this year.
Q2 2017 was a record quarter for global FinTech investments with $12.4bn committed
- Total FinTech Investments have grown consistently progressively since a low of $4.3bn in Q4 2015. Q3 2017 saw an increase of 28.5% QoQ and 78.6% YoY.
- The increase in funding was not represented in the number of deals which fell by 32% to 388, a five-quarter low.
- The fall in deal numbers along with the increase in funding can be partly put down to the large number of highly valued deals closed in Q3 2017. The largest deal went to Flipkart, which received India largest funding round to date. The company which runs India leading E-Commerce platform received $2.5bn of funding from SoftBank vision fund in August. This investment will allow the company to expand into FinTech.
2017 is already a record year for FinTech investments in Europe
- FinTech Investments in Europe gradually increased at a CAGR of 14.7% between 2014 and 2016. 2017 will see further increases in investment as the first three quarters of this year have already seen $1.6bn more investment than last year. Despite this Europe has still received less than half of total investment in North America and Asia.
- Funding to North American based FinTech companies looks on track to regain their strength after investments fell by 26.7% YoY in 2016. In the first three quarters of this year the region received $430m more investment than last year suggesting that Investment levels should be similar to the record level from 2015 by the end of the year. One notable deal closed in North America went to the US based online loans and credit scoring company LendingPoint which received $500m of debt financing in August arranged by Guggenheim Securities. The company will use the money to further develop its consumer installment loan portfolio.
- Investments in Asia increased rapidly between 2014 and 2016 with a CAGR of 56.6%. Investments seem to have slowed in the first three quarters of this year with only 11bn invested so far.
The share of deals valued $1m or less has been declining since 2014, at the expense of increased share of deals over $5m
- The share of FinTech investments valued $25m or above increased by 4% between 2014 and 2016. This increase looks set to continue, as almost 20% of deals closed in the first three quarters of this year were valued in this size bracket. This included 65 deals valued at $100m or above.
- To an extent the fall in deals valued $1m or below has been balanced out by a rise in deals valued $1-$5m, with these combined segments received 70% of the deal share in 2014 and 2015. However, in 2016 the further fall in small deals wasnt offset with the rise in deals valued $1-$5m. The first three quarters of this year has seen this trend continue with only $20% of deals valued $1m or below.
Almost half of all deals closed in Q3 2017 went to companies specialising in Payments & Remittances, Infrastructure & Enterprise Software and Marketplace Lending
- Payments & Remittances companies received the largest share of deals in the third quarter of the year with a total of 71 deals closed. The sector received a total of $5.1bn of investment in Q3 2017, equating to 41% of the total global FinTech funding.
- Infrastructure & Enterprise Software and Marketplace Lending companies both received 14% of deals. Despite this equal deal share, Marketplace Lending companies received more than 3 times the total funding. In Q3 2017 $2.87bn was committed to the subsector, while only $843.5m went to Infrastructure & Enterprise companies
- WealthTech and Data & Analytics companies both received more than 10% of the deal share. With Chinese WealthTech company Feidee receiving one of the top 10 largest deals in Q3 2017. The online platform specialising in personal finance management secured $200m of Series C funding in late September from KKR & Co.