We had this story all written and then when we did our server migration over the weekend, it disappeared, so we'll start the process all over again. Maybe this one will be better!
We were a wee bit cheeky about the term "smart money" in our title, but in fact the big VCs do seem to have the golden touch when it comes to monetizing their VC investments. Still there's just a massive wad of institutional capital sloshing around out there chasing yield, and some of the valuations on these startups defy gravity and common sense, and certainly not all are going to make it for the long haul. However, it is still worth noting where the big boys are investing and in what sectors. CB Insights tallied all the major fintech investments by "smart money" in 2015 & 2016, and here's what they found.
"In 2016, there were 831 investments to VC-backed fintech startups, just shy of 2015?s record 848 investments. Top VC investors in the category participated in 187 deals worth approximately $5.97B from 2015-2016.
Though overall investment pace slowed down in 2016, smart money VCs are still finding new opportunities in the space beyond traditional fintech areas such as personal insurance, payments, and alternative lending"
Of the fintech categories they identified below, the Insurtech space had the most with 13 "smart money" investments, followed by the Payment Tech/ POS Credit sector with 11 investments. So that tells you what was hot in 2015 & 2016. What will be the next "big thing" in 2017 & 2018?
- Accounting/Bookkeeping Canopy Tax, CBANC Network, eShares, Seed, TravelBank, Verato
- Alternative Lending Blispay, Bond Street Marketplace, Earnest, Open Collective, Puddle
- Bitcoin/ Blockchain ABRA, Align Commerce, Axoni, BlockCypher, Blockstream, Colu, Gem
- Hedge Funds/ Alternative Data Numerai, Polychain Capital (in fact, this hedge fund invests in cryptocurrencies), Second Measure
- Insurtech
Bright Health, Clover Health, CoverWallet, Cyence, Hibob, Indio, Insurance Zebra, Jetty, Ladder Financial, Shift Technology, SimplyInsured, Verifly, Zendrive
- Payment Tech/ POS Credit AccessPay, Branch International, Bread, Final, Payable, PayJoy, Returnly, Revolut, Tesorio, Verse, Zero
- Personal Finance/Wealth Management Albert, Cheddar Up, Digit, Even, Guideline, Pariti Technologies, Penny App
- Real Estate Investing Cadre, Castle, Point Digital Finance, Property Partner, RealtyShares, Roofstock