WealthTech funding is having another record year with total amount invested currently at 30% higher than 2017’s total
- Global WealthTech deals have raised $3.4bn so far this year. Funding rounds over $100m make up almost half of the total value invested; there have been nine so far this year. The amount of capital raised by deals in this bracket has been increasing every year since 2014. Already in 2018 the total amount raised from deals $100m and over is 50% higher than last year.
- The largest deal this year, which contributes 14.6% to the total amount invested, was $500m raised by Credit Karma in a secondary market round. The US company has helped over 80 million members to better understand their finances through free access to credit scores, reports, tools and education. In March this year Silver Lake, an American private equity firm, purchased a $500m stake in the company.
- The second largest deal was raised by Revolut, a London based challenger bank that offers a pre-paid debit card, currency exchange, cryptocurrency trading and peer-to-peer payments. The company raised $250m in Series C round which will be used to expand worldwide starting with the U.S, Canada, Singapore, Hong Kong and Australia.
- Deal activity looks set to decrease this year. In the first three quarters there have been 131 deals which is 52.0% of 2017’s deal activity.
Global WealthTech Investment in Q3 2018 is 48.2% lower than same quarter last year
- WealthTech Investment in Q3 2018 is 48.2% lower than same quarter last year
- Last quarter saw $657.6m worth of investment. This is approximately half of the total capital raised in Q3 2017. Deal activity has also decreased; 35 deals in Q3 2018 as compared to 52 in the corresponding quarter last year.
- The biggest deal in Q3 2018 was raised by Snowball Finance in a $120m Series D round. The company is a social network and information portal for investors in China. The CEO and founder Fang Sanwen said that the capital raised will go towards product development, improving the trading system and talent recruitment to improve user experience.
- Q1 2018 has been the strongest quarter so far this year, it makes up 56.8% of the value invested in the first three quarters. In fact four out of the five largest funding rounds this year were raised in this quarter, including the previously mentioned Credit Karma deal. These four deals totalling $992.4m make up 51.2% of the total value invested in Q1.
Companies in the Personal Finance subsector are attracting the most interest among investors in WealthTech
- 45% of all the 1,458 WealthTech deals completed since 2014 have been in the Personal Finance subsector. The largest deal in this subsector was the previously mentioned Credit Karma round. Another large deal was $64m raised by North American company Nerdwallet in a Series A round. The company helps people make and manage financial decisions by comparing various products available from various banks and insurance companies.
- The second largest subsector was Retail Investing & Trading which makes up 18% of total deal activity.
- Online Banking, Robo Advisors and Advisory & Brokerage have each attracted a healthy proportion of total deal activity; 15%, 12% and 10%, respectively. Two noticeable deals from the online banking subsector were $150m and $143m both raised by Nubank. The digital bank and credit card company located in São Paulo offers a credit card that is controlled though a mobile app.
- The largest deal in the Robo Advisors subsector was $100m raised by Betterment. The New York based company is a registered investment advisor and a broker dealer.
Companies based in the United States have completed the most WealthTech deals since 2014
- US WealthTech companies have held 430 funding rounds since 2014, making up 41.4% of total deal activity during that period. In fact, the United States had three times more deals than the next most active country in the WealthTech sector; the United Kingdom. However, apart from the previously mentioned deal to Credit Karma, none of the other top 10 deals since 2014 have happened in the United States.
- Companies in the United Kingdom have had the second largest amount of deal activity. There has been 144 deals since 2014. Three of the six largest deals in this country were raised by Atom Bank. The digital financial company and challenger bank has raised $433.0m since 2015.
- India had the fourth highest amount of deal activity; 395 deals since 2014. The five highest value deals in this country were raised by Janalakshmi. The company is a leading digitized bank serving all customer segments and communities. In March this year the company received the ‘commencement of business’ certificate from the Reserve Bank of India so it is able to launch Jana Small Finance bank. Altogether, $499.2m has been raised by the company which makes up 81.2% of the total amount invested in India since 2014.
- The top five countries make up 61.7% of total deal activity in the WealthTech subsector from 2014.
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. ©2018 FinTech Global