According to a new study out by CB Insights, fintech funding and venture capital spiked dramatically last year. As if we are surprised. The report showed that much of the growth occurred in the US & UK, but came from investors in China, Russia and the Middle East. And while much of it was in the form of VC, other funding came to firms such as Kabbage in almost $1B in new credit facilities last year. Clearly adoption of fintech is on the rise, and the funding into the category reflects that.
“Global investment in financial technology (fintech) ventures reached another all-time high in 2017, buoyed by a surge in funding for startups in the United States, United Kingdom and India, according to Accenture (NYSE:ACN) analysis of data from CB Insights, a global venture-finance data and analytics firm.
Fintech financing rose 18 percent in 2017, to US$27.4 billion, with the value of deals in the U.S. jumping 31 percent, to $11.3 billion. Deal values almost quadrupled in the U.K., to US$3.4 billion, and soared nearly fivefold in India, to US$2.4 billion. The number of fintech deals also rose sharply, from just over 1,800 in 2016 to nearly 2,700 in 2017, underscoring continued appetite from investors scouring the globe for innovation in insurance, banking and capital markets startups.
“Much of the growth, particularly in the U.S. and UK, has been driven by big new investment flows from China, Russia, the Middle East and other emerging economies,” said Julian Skan, senior managing director in Accenture’s Financial Services practice. “In addition, we saw more and more B2B fintech models proving out at the banks, coupled with larger and later-stage investments as the fintech world scales up. Also fueling growth was the rapid rise of ‘insurtech’ ventures where traditional carriers see new opportunities. India’s boom was driven by strong demand for cashless services following the country’s ‘demonetization’ events.”
Total global investment in fintech ventures between 2010 and 2017 reached US$97.7 billion, with U.S. startups accounting for more than half (54 percent) of all investments. The volume of fintech deals globally within that timeframe grew at a compound annual rate of 35 percent, with total funding growing at a compound annual rate of 47 percent…”