Payments & Remittances deals drive FinTech investment in China to $63.8bn since 2014

FinTech investors have invested $24.7bn in Payments & Remittances companies across 91 transactions since 2014

  • 41% of the $60.1bn capital raised since 2014 has involved companies in the Payments & Remittances subsector. The largest deal of the period went to Ant Financial in a Series C round of $14bn. It is unsurprising that Payments & Remittances captured the lion share of investment as China heads to become the world’s first cashless society and therefore companies creating innovative payment methods not involving cash are thriving.
  • WealthTech companies in the country have also captured a healthy proportion of total investment, with 19% of funding going to this subsector.
  • Marketplace Lending and Institutional Investments & Trading companies have also attracted a significant amount of total investment with 12% and 9% respectively.
  • The other category includes companies that operate in InsurTech, Infrastructure & Enterprise Software, Blockchain, Cryptocurrencies and Funding Platforms subsectors.

The top three deals since 2014 involved Payments & Remittances company Ant Financial

  • The top 10 transactions in China have collectively raised over $34.4bn since 2014, which is equal to 57.2% of the total capital invested in the period. Only three subsectors were present in the top 10; WealthTech, Institutional Investments & Trading, and Payments & Remittances, with Payments & Remittances accounting for the top three deals.
  • The largest deal of the period came from the previously mentioned $14bn Series C round from Ant Financial. The online payment services provider will use the funding for technological development, to cultivate high-tech talent in emerging markets and to accelerate the globalisation of Ali Pay – its third-party payment service. Following the completion of this deal, Ant Financial is now valued at $150bn, placing it above both Morgan Stanley ($66.0bn) and Goldman Sachs ($72.0bn) combined.
  • The largest deal of the period after Ant Financial came from Du Xiaoman Financial’s $2.9bn debt financing round in Q4 2018 lead by Bank of Tianjin. The company provides money management services, risk management, data analysis and econometric models analysis and plans to use the capital for educational instalment and other scenario consumptions.

A lack of large deals sets FinTech investment in China to decline in 2019

  • FinTech companies in China have raised $60.1bn across 760 transactions since 2014.
  • Investment in 2018 hit a record high of $31.5bn, across 304 transactions, with 29 of these being valued at $100m or above. The record funding year was driven by Ant Financial’s $14bn Series C round, accounting for 23.3% of total funding since 2014 alone. This record year saw investment grow at a CAGR of 126.4% between 2014 and 2018. Even upon exclusion of the Ant Financial deal, 2018 still raised a record $17.5bn.
  • H1 2019 has seen a significant drop in FinTech investment with investment making up only 2.9% of last years’ total. This is due to a lack of large deals which have been seen previously, with only four deals valued at or above $100m in H1 2019, compared to 29 of this deal size range in 2018. This drop can be explained by a dampened investor appetite in the country due to trade tensions between the US and China.

All the top 10 FinTech investors in China are based in the country or The United States

  • The 10 most active FinTech investors in China have completed 217 deals between them since 2014. All of the top 10 investors in the country are venture capital firms.
  • US-based Sequoia Capital was the most active investor of the period completing 40 transactions since 2014. The venture capital firm’s investments include two of the top 10 deals in the country since 2014; the $14bn Series C round from Ant Financial in Q2 2018 and JD Digit’s $1.0bn Private Equity round in Q1 2018.
  • The most active Chinese investor of the period was ZhenFund who have participated in 24 transactions since 2014. ZhenFund have participated in rounds totalling $292.1m, with the largest being Xiangwushuo’s $65m Series B round in Q3 2018.
  • All the top 10 investors in China are based in either China or the United States. China is seen as a global FinTech hub; hence investment not only comes from within the country but investors from outside China are interested in the opportunities here.

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

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