Who said Fintech is dead? Q1 sees $5.7bn invested

Who said Fintech is dead? Q1 sees $5.7bn invested

Chris Skinner

Chairman at The Financial Services Club

Views 433

Who said Fintech is dead? Q1 sees $5.7bn invested

31.05.2016 10:00 am

I was just sent a press pre-release copy of The Pulse of Fintech, the quarterly global report on Fintech VC trends published jointly by KPMG International and CB Insights.  The findings are quite interesting this quarter and show that, after a significant pullback in funding in Q4 2015, mega funding rounds have lifted quarterly investment into VC-backed fintech companies by over 150 percent in the first quarter of 2016.

Key highlights from the Pulse of Fintech include:

  • Q1 2016 saw a big rebound in funding to the Fintech sector, with total investment in fintech companies hitting US$5.7 billion. Globally, VC-backed fintech companies drew US$4.9 billion in funding, rising from just US$1.9B in Q4’15.
  • VC-backed deal activity rose dramatically quarter over quarter. Q4 2015 saw Fintech deal activity fall to the lowest point since Q2 2014. This drop reversed course in a big way in Q1 2016 as VC-backed fintech deals rose to a new quarterly high of 218 globally.
  • Larger deals spurred fintech funding growth in Q1 2016. Q1 2016 saw thirteen $50M+ rounds to VC-backed Fintech companies, a slight rise from the ten $50M+ rounds in Q4 2015, but a drop from the eighteen mega-rounds in Q1 2015.
  • Asia saw funding to VC-backed Fintech companies jump to US$2.6B in Q1 from just US$0.5B in Q4. This dramatic rise came on the back of the $1B+ mega-rounds to JD Finance and Lu.Com.

Fintech1

North America sees funding bounce back

North America saw both fintech funding and deals rebound following a major drop in Q4 2015, as VC-backed fintech companies raised US$1.8B across 128 deals, an increase of 80 percent in funding quarter-over-quarter. Deal activity to VC-backed fintech companies in North America is on pace to reach a new high in 2016 at the current run rate, as the 128 fintech deals registered over the three-month period was the largest quarterly total since Q2 2015.

Chinese mega-rounds propel Asia fintech funding

Following a drop off in Q4 2015, fintech investment in Asia reversed course in Q1 2016 to hit a new high of US$2.6B.  China accounted for $2.4B of Asia fintech funding and 49% of fintech funding across all geographies, primarily as a result of $1B+ funding rounds to JD Finance and Lu.com.

Europe fintech deals rise; no spike in funding

Europe saw VC-backed fintech deals reach a five-quarter high, rising from 37 in Q4 2015 to 47 in Q1 2016. European Fintech funding remained almost level with Q4 2015’s total at US$0.3B. UK funding rounds to WorldRemit and LendInvest pushed UK funding to account for over half of Europe’s fintech funding total.

Corporates participate in over 20 percent of deals for fifth straight quarter

Corporate investors continue to play a large role in the fintech ecosystem, with global deals to VC-backed Fintech companies standing at 24%+ in three of the past five quarters. Of note, Europe saw an upswing in corporate Fintech investment during Q1 2016 as corporate participation in deals to VC-backed fintech companies rose from 8% in Q4 2015 to 21% in Q1 2016.

KPMG and CB Insights will discuss findings from the Pulse of Fintech report, investment trends and key players in fintech during a live webinar on 31 May, 2016 at 11:00am EDT [register here] and you can find the full report over here.

Latest blogs

Otabek Nuritdinov Safenetpay

A strong fintech needs more than just access to funding

  Investors, both private and institutional, are excited about investing in fintechs that are in the payments services business. What are the issues that really should matter to you, as a client? In 2019, institutional investors Read more »

Martijn Bos Holland FinTech

Get your head up in the clouds, it’s good for business

How Digital Transformation is reshaping competition in financial services The message is clear and it’s coming at us from all sides: digitalize now. No business unit seems to be immune to the onslaught of cloud-based, AI-driven, real-time, Read more »

Sonny Aulakh Pure Storage

How to support remote working without compromising productivity

As the need to work remotely continues to impact the daily lives of people and businesses around the globe, it places unexpected demand on IT departments. How do you transition supporting 30% of your workforce to work remotely to 100% in a matter of Read more »

Martijn Bos Holland FinTech

Making it through the rain: Finance in times of turmoil

You’d need to be living on a remote island, without electricity or internet to not be aware of what the world is going through right now – a medical crisis that has spread across the world and disrupted supply chains, goods and services production, Read more »

James Devoy Sysnet Global Solutions

PCI DSS and Remote Assessments

COVID-19 is obviously changing many aspects of daily life. Some will be short term measures to see us all through these times, although I wonder how many will become more permanent fixtures in our lives. The PCI SSC has provided guidance to allow Read more »

Related Blogs

Huw Kwon Cognizant

Entity v process: The collective power of AI

Most, if not all, financial institutions are exploring how the range of new and emerging technologies collectively known as artificial intelligence (AI) can improve their performance across a range of activities and processes.  AI offers methods and Read more »

Will Hurst Monevo

How coronavirus is affecting the Fintech sector

Customer demand for credit won’t alter, in fact it’s likely to increase during times of economic uncertainty, says Will Hurst, Head of Commercial Development at Monevo. Will says Fintechs, such as Monevo, part of Quint Group, are well placed from an Read more »

Gemma Doswell Paybase

Paybase Predicts...

What we said in 2018 Read more »

Martijn Groot Asset Control

The Top Tips to Consider When Choosing the Right Fintech Partner – How to Get it Right

As banks and other financial services firms to look to strengthen their services and tackle increased competition from new rivals in banking and investment management, fintech partnerships are becoming increasingly popular across the industry. Read more »

Lina Andolf-Orup Fingerprints

Finger on the pulse! The Countdown to 2020 has Begun

With 2020 in sight, now is the perfect time to pause and reflect on the past three months and see how the world of biometrics has evolved since our last update. With everything from high profile announcements to some news you may not have heard, Q3 Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel