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.
The following investor(s) were tagged in this article.