More than $66.3bn was invested in Payments & Remittances companies globally between 2014 and H1 2019, across 2,073 transactions
- Total investment between 2015 and 2018 grew at a CAGR of 52.1% reaching nearly $20bn last year. The record funding in 2018 was driven by the $14bn Series C round from Ant Financial, making up 21.1% of total funding since 2014 with this deal alone.
- On exclusion of Ant Financial’s private equity deal, investment in H1 2019 is already 59% higher than in the whole of last year.
- Funding in 2014 reached 9.2bn driven by a $3.5bn private equity deal from First Data Corporation, which was used to deleverage and strengthen the company’s balance sheet.
- Deal activity has been decreasing since 2015, with 2018 completing only 43.7% of transactions compared to 2015’s total. Paired with the increase in total capital invested, average deal size over the period grew from $11.1m in 2015 to $88.4m in 2018, showing the continued maturity of the sector, with larger transactions being completed.
- Deals under $100m have remained stable year-on-year, with deals over $100m being the cause of volatility in the subsector.
The proportion of Payments & Remittances deals globally valued above $100m has increased more than four-fold between 2014 and H1 2019
- The global Payments & Remittances landscape has witnessed a shift over the past five and a half years from investors predominantly backing deals under $5m, towards backing more late-stage deals.
- Indicating the continued maturity of the landscape, the proportion of deals valued below $5m fell from 52.5% in 2014 to just 22.3% in H1 2019.
- This shift accelerated in 2017 with the number of deals valued above $100m reaching 25, up from 15 in 2014.
- The share of deals valued above $100m increased by 14.2 percentage points (pp) from just 4.2% in 2014 to 18.4% in H1 2019, with 53.9% of the transactions in this deal size range involving companies based in Asia or Europe.
- Wirecard, an electronic payments solution provider, raised the largest deal in Europe with their $1bn post-IPO equity round used for further global expansion into Japan and South Korea.
Deal activity has been shifting from North America to Asia and Europe since 2014
- North American Payments & Remittances companies have dominated deal activity over the past five and a half years; however, investment appears to be moving out of the region as investors look for opportunities in other regions.
- The proportion of deals involving North American companies fell from over half of all transactions in 2014 to just 32.5% in the first half of this year, as investor appetite has shifted towards Asia and Europe.
- European Payments & Remittances companies increased their share of deals from 23.3% in 2014 to 31.3% in H1 2019, nearly equalling North America’s share. This growth seems to be due to initiatives such as the revised Payment Services Directive (PSD2) in Europe.
- As most innovation starts in North America, a first mover advantage was seen in investment in this region, however as the landscape matures, investors look to shift towards Asia to capitalise on the growing digital payments ecosystem that has been exploding in the region over the past few years, with the world’s top 10 mobile payments adopters being in eight Asian markets according to PwC’s Global Consumer Insights Survey 2019.
Seven of the top 10 global Payments & Remittances deals have come from Asian companies
- Over $31.6bn has been raised in the top 10 Payments & Remittances deals globally since 2014, with seven of these involving Asian companies, and only one company from North America.
- The largest funding round was the previously mentioned Ant Financial’s $14bn Series C round, pushing the company to a value of $150bn, more than Goldman Sachs ($72.0bn) and Morgan Stanley ($66.0bn) combined. Ant Financial will use the funding to accelerate the globalisation of its third-party payment service Ali Pay, cultivate high-tech talent in emerging markets and provide better services through its technological development.
- The only North American deal to enter the top 10 was First Data Corporation’s $3.5bn private equity round back in Q3 2014 lead by KKR and Rancilio Cube.
- The top 10 Payments & Remittances deals globally have collectively raised $31.6bn, making up 47.7% of total amount invested in the last five and a half years.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2019 FinTech Global
