The value invested was boosted by $1.8bn in post-IPO equity raised by Mercado Libre
- The value invested in Payments & Remittances companies has reached more than $57bn across 1966 transactions since 2014.
- The capital raised each year has seen an exponential increase since 2015, growing by 258% between then and last year. There was a 56.9% decrease in deal activity in this time period.
- The record year in 2018, which saw almost $20bn invested, can be attributed to FinTech conglomerate Ant Financial’s $14bn Series C round. In fact, the two biggest transactions in the Payments & Remittances sector last year were both raised by companies based in Asia. The second biggest deal was Singapore-based Sea, which raised $575m in post-IPO equity.
- The top deal in the first three months of this year belongs to Argentinian e-commerce platform Mercado Libre, the company raised $1.8bn in post-IPO equity funded by worldwide online payments system PayPal and San Francisco-based public and private investor Dragoneer Investment Group.
Global Payments & Remittances investment last quarter was more than quadruple the level in Q1 2018
- The capital raised last quarter reached $3.1bn, which is more than quadruple the amount invested compared with the corresponding quarter in 2018. Deal activity in Q1 2019 was the lowest out of the last five quarters, signaling the maturing of the Payments & Remittances landscape as investors move to fewer, later stage deals.
- There have been eight deals valued at $100m or more so far this quarter, which have collectively raised $2.8bn. There were 14 transactions completed in this bracket in the whole of last year.
- All but one of these funding rounds was raised by companies in the Mobile Payments and E-commerce subsectors. The remaining transaction was Airwallex’s $100m Series C round. There were seven investors in the funding round led by venture capital firm DST Global. The Hong Kong-based startup offers end-to-end solutions for businesses to move money programmatically at a global scale.
North America’s share of Payments & Remittances deals has more than halved since 2014
- North America’s market share of deals in Payments & Remittances shrank 15.1 percentage points (pp) from 54.7% in 2014 to 39.6% last year. In the first three months of the year, this share was even lower at 22.0% of the total number of deals. Companies based in Europe and Asia, on the other hand, have been steadily increasing their share of Payments & Remittances transactions since 2014.
- Africa’s share of deals increased 1.6 times between 2014 and 2018. In the first quarter of this year its deal share nearly reached 10%. This increase can be expected to continue as the large financially underserved population leapfrogs traditional payment methods and starts using mobile and P2P payment platforms.
- Despite the uncertainty brought about by Brexit, the United Kingdom still dominates Europe in the Payments & Remittances sector. Companies in the country make up 209 out of the 517 deals in Europe since 2014.
- The Asian market has been flourishing in the past five years both in terms of value invested and deal activity. Asia was the most active region for deal activity in the first quarter of the year. Companies in the region were responsible for approximately one in every three transactions during this period.
Companies in the Mobile Payments and E-Commerce subsectors are responsible for more than half of the total deals since 2014
- E-Commerce and Mobile Payments are the top two most popular subsectors within Payments & Remittances, with respect to the number of deals, followed by Point of Sale. Almost three quarters of the deal activity in the space has come from these three subsectors since 2014.
- The three largest deals so far this year have been raised by companies in the E-commerce subsector. The biggest transaction was the previously mentioned Mercado Libre funding round. The second largest was Marqeta’s $250m Series E round. The Marqeta Platform provides a fully documented, open API issuer processor platform. This latest capital injection values the company at $1.9bn and its customers include other FinTech companies such as Alipay, Square and Klarna.
- P2P Payments is the smallest subsector with companies in this subsector attracting just 5.9% of deal activity between 2014 and Q1 2019. The largest investment was Kakao Pay’s $200m private equity round funded by FinTech conglomerate Ant Financial. The president of Ant Financial, Douglas Feagin commented on the deal, “South Korea is an important market for Ant Financial in its global expansion, and we see many opportunities in the market for innovative services and growth in mobile payments,”
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