Investment in Spanish FinTech companies surged in 2017, despite a slowdown in deal activity


Spanish FinTech firms raised over $120m across 19 deals in 2017

  • Spanish FinTech deal volume had minimal variation between 2014 and 2015 with 22 and 20 deals recorded, respectively. At the same time, total investment dipped by 62.8% from $26.4m in 2014 to $9.8m in 2015, indicating a significant fall in average deal size.
  • The Spanish FinTech space saw an uptick in both deal activity and total investment in 2016 with the number of deals reaching 34 and total funding just under $12m. This was however still less than half of the funding levels achieved in 2014. Part of the surge in deal activity was driven by Bankia Fintech which invested $160,000 in eight equally sized seed rounds.
  • Despite deal activity dropping by 44.1% in 2017 to 19 deals, investment in Spanish FinTech companies increased 10x to $121.8m. This was driven by larger and later stage equity funding and $50m of debt financing provided by TransKapital Bank to ID Finance.

Spanish FinTech investment rebounded in Q4 2017

  • In the opening quarter of last year Spanish FinTech investment jumped more than 10-fold to $55.54m, up from $5.23m in Q4 2016, despite both quarters recording an equal number of deals. This jump was driven by the $50m debt finance facility raised by ID Finance, an online lending startup.
  • Q3 2017 deal activity slipped to 3 from 5 in Q2 2017, with capital raised falling by 61.89% QoQ.
  • However, in Q4 funding levels recovered with $22.1m, boosted by a $16m series A funding round to Spotahome, a real estate tech platform.

Spanish FinTech industry sees return of deals above $10m for the first time since 2014

  • The proportion of deals valued below $0.5m grew from 62.5% in 2014 to 72.4% in 2016. However, sub $0.5m deals slumped in 2017 accounting for only 5.3% of all deals.
  • The proportion of mid-sized deals between $1m and $10m has shown significant variance over the past few years, falling from 38.5% in 2015 to 17.2% in 2016 before rebounding back up to 47% last year. However, this is likely due to the small deal sample sizes.
  • An indication of the growing maturity of the Spanish Fintech funding landscape is that the proportion of deals valued above $5m grew from none in both 2015 and 2016, to 23.6% in 2017.

The top 10 Spanish FinTech deals in 2017 raised nearly $117m

  • The top 10 Spanish FinTech deals in 2017 raised $116.9m, equal to 96% of the total invested into Spanish FinTech companies last year. This concentration ratio is higher than in 2016, where the top 10 deals represented 87% of total FinTech investment in Spain.
  • ID Finance, focused on credit scoring and emerging market lending, topped the list with $50m debt financing from TransKapital Bank secured in February.
  • The biggest equity financing deal went to Fintonic, a mobile banking platform, which raised $27.97m in their series B round of funding lead by ING Group.
  • The data shows a more mature Spanish FinTech funding environment from last year as all the top 10 (equity based) deals were venture funded, whilst 7 of the top 10 deals in 2016 were only smaller seed investments.

Nearly 90% of the total capital raised by Spanish FinTech firms in 2017 went to three sectors

  • Of the $121.8m of funding that poured into the Spanish FinTech ecosystem in 2017, 45.8% went to Data & Analytics companies, with $55.8m raised in the sector. This was primarily driven by the $50m debt finance facility raised by ID Finance in Q1.
  • WealthTech followed with 27.3% of funding at $33.3m. The largest deal went to the previously mention Fintonic series B financing.
  • The smallest proportion of funding, 1.0%, flowed into the Payments & Remittances sector taking just $1.2m in 2017.
  • When taking into consideration equity only deals, total funding into the Spanish FinTech space was $71.8m. Consequently, the WealthTech and Real Estate sectors took 46.3% and 27.0% of this funding respectively, with Data & Analytics dropping to 8.1% of total 2017 funding.

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