FinTech funding ‘reaches global inflection point’

Last year saw FinTech funding reach a global inflection point, pulling in $34.5 billion across 1,913 deals – with annual investment falling 15 per cent year-over-year.

However, CB Insights’ State of FinTech report pointed out that 2018 funding was inflated by Ant Financial’s record $14 billion deal, and removing this would make 2019 a record funding year.

North America, Europe and Asia all saw deals dip year-over-year, partially driven by a five-year low in early-stage deals (seed and Series A) of 59 per cent – although deals to Series B companies topped five-year highs.

The market analysis suggested that this is a positive signal that more startups are maturing, which becomes more difficult with each subsequent financing.

Nearly half of 2019 funding was concentrated in 83 mega-rounds (over $100 million) totalling $17.2 billion – with last year breaking records for mega-rounds in every market except Europe.

The fourth quarter saw approximately $9.4 billion invested across 452 deals, a quarterly funding high when adjusted for Ant Financial’s investment. FinTech funding set quarterly records twice in 2019, including a new high in the final quarter.

Despite macro-economic pressures in some regions, the FinTech sector has been resilient, according to CB Insights.

India and China both saw funding drop off in the fourth quarter of 2019, when adjusted for One97’s $1 billion Series G round, but India regained the lead in deals, seeing 31 in the fourth quarter. India saw $1.87 billion invested - $1.66 billion of which went to One97 - while $298 million went to China.

There were 67 venture capital-backed FinTech unicorns, worth a combined $244.6 billion last year – with a record of 24 unicorn births.

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