Payments & Remittances companies globally have raised over $50bn since 2014
- More than $53bn was invested in Payments & Remittances companies globally between 2014 and H1 2018, across 1,766 transactions.
- Deal activity between 2015 and 2017 fell from 499 deals to 319, while funding increased by 123.6%. As a result, the average deal size more than trebled during the same period as investors engaged in more later-stage transactions.
- Global Payments & Remittances funding has been in an upward trend, increasing at a CAGR of 47% between 2015 and H1 2018. Funding in 2018 has already set a record with $17.5bn raised in H1, driven mainly by the $14bn Series C funding that Ant Financial received in Q2. This funding, led by Temasek Holdings and GIC, will be used to accelerate Ant Financial’s global expansion plans of third-party payment service Alipay.
Funding in Q2 2018 surges, following three quarters of decline
- Global Payments & Remittances funding in Q3 2017 reached $5bn across 71 deals. Flipkart, an India e-commerce platform, raised $2.5bn from SoftBank in August 2017 bolstering the company’s ambition to rival Amazon in the region.
- Deal activity declined over the past five quarters from 105 deals in Q2 2017 to 46 in Q2 2018. However, funding surged in Q2 2018 to $16.8bn, mainly driven by the previously mentioned $14bn record funding that Ant Financial received.
- When excluding the investment that Ant Financial received, Q2 2018 still outperformed the previous two quarters with $2.8bn raised across 45 transactions.
- Paytm Mall, one of Indis’s largest e-commerce platforms, raised $445m at a pre-money valuation of $1.5bn from SoftBank and Alibaba in June 2018. The company is aiming for a $10bn run rate at the end of fiscal year 2018/19 and the funds will be deployed to empower shopkeepers with technology and build superior logistics.
Ant Financial claims 80% of the capital invested in Payments & Remittances companies in H1 2018
- More than $15.9bn was raised in the top 10 global Payments & Remittances deals in Q2 2018, equal to 94.6% of the total amount invested during the period. Ant Financial, which raised $14bn in June, claimed 80% of the total capital raised in the subsector in the first half of 2018.
- Singapore-based Sea, a digital financial services platform providing e-wallet services to consumers through its AirPay App, raised $575m of Post-IPO equity to fund international expansion. Sea raised $884m in an IPO at a valuation of $4.9bn in October 2017.
- PumaPay, an Israeli open-source blockchain payment solution provider, raised $117m in May 2018, which was the largest ICO in the subsector in H1. The funds will support its open source blockchain-based billing protocol that will provide merchants with a way to process crypto currency payments. PumaPay also said that it signed up over 40 companies with over $10 billion worth of transactions per year as partners.
Payments & Remittances deals have been shifting from North America to Asia
- North American companies claimed the lion share of global Payments & Remittances deal activity between 2014 and H1 2018, with a total of 827 transactions. First Data Corporation, a payment processing solution provider, raised $3.5bn in private equity funding from KKR in July 2014. This is the largest Payments & Remittances deal in the region to date and the company subsequently completed an IPO in October 2015.
- However, North American companies’ share of global deals declined from 55.3% in 2014 to 37% last year as investors look for opportunities in other regions.
- The global share of deals in Asia increased from 16.7% in 2014 to just under a quarter in H1 2018, as investors go after the big market encouraged by the growth of smartphone adoption rates in the region. Including the $14bn funding that Ant Financial received in Q2 2018, there have been 13 Payments & Remittances deals in Asia valued above $500bn since 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