Global FinTech investment has almost doubled since 2014
The global FinTech industry received nearly $40bn-worth of funding across 1,778 deals in 2017
Global FinTech investment increased steadily between 2014 and 2017 at a CAGR of 18.2%. The total amount invested in 2017 reached a record high of $38.9bn.
Funding from deals valued over $100m increased by 43.3% YoY to reach $23.3bn, while deals valued less than $100m showed a more modest increase of 13.6%.
The largest deal of 2017 went to Flipkart, an e-commerce marketplace based in India. The company received $1.5bn from Softbank in a private equity round in the third quarter of the year. The large investment positions Flipkart as a strong contender against its main competitor, Amazon India.
Despite the growth in funding, deal activity has shown a downwards trend for the last two years. There were just 1778 deals in 2017, 6.2% less than the value for 2014.
2017 saw two of the biggest quarters for FinTech funding ever
After a record high in Q3 2017, FinTech companies globally raised $10.1bn in Q4 2017 making it the third strongest quarter to date in terms of total funding.
The largest deal of Q4 2017 went to Lufax, a Chinese online marketplace for the trading of financial assets. The company raised $1.2bn in a Series B round led by COFCO with co-investment from China Minsheng Bank and Guotai Junan Securities.
Deal activity was historically low in Q4 2017 with just 346 deals completed. This represents a YoY decrease of 16.2%.
The lack of funding from deals above $100m towards the end of 2016 and beginning of 2017 suggests that large deals may have been held off amidst the political uncertainty surrounding Brexit and the US elections.
Y Combinator holds the top spot for most active FinTech investor globally in 2017
The top 10 most active investors in the global FinTech sector in 2017 participated in 9.9% of all deals completed during the year. All of the top 10 most active investors are headquartered in the US.
Y Combinator was the most active FinTech investor of 2017 with 29 deals. The San Francisco-based seed accelerator model involves an intake of two classes of startups a year, in which they invest small amounts. Additionally, Y-Combinator often makes follow-on investments in its alumni. For example, they led a $120K seed round for payments services company, Flutterwave, a participant of their program in 2016. In Q3 2017, they then took part in the company $10m Series A round.
Digital Currency Group (DCG) came in joint second with 19 deals. The company focuses on early-stage investments in the digital currency and blockchain sectors. Notably, DCG led a $2m debt financing round in Q1 2017 for Cambridge Blockchain, a provider of digital identity software.
London has overtaken New York as the top city for FinTech deal activity
New York, San Francisco and London are consistently the top three cities globally in terms of deal activity.
From 2014 to 2016, New York held the top spot with a deal share ranging from 34.5% to 37.6%. However, this value dropped to a low of 30.2% in 2017.
London deal share has gradually increased over this period from 26.4% in 2014 to reach a high of 42.7% in 2017. This marks the first time London has surpassed New York to become the city with the highest number of FinTech deals. The largest deal to a London-based company in 2017 went to P2P lending platform, Lendable. The company raised ?300m in debt financing from Castle Trust Capital.
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