Fintech fundraising grew strongly in major markets in 2019, Accenture

Thursday 20 February 2020 10:54 CET | News

Investment in fintech ventures has risen sharply in most major markets in 2019, led by gains in the US and UK and emerging economies such as India and Brazil, according to Accenture.

Despite those gains, the total value of fintech deals globally dipped 3.7%, to USD 53.3 billion from USD 55.3 billion in 2018, when totals were boosted by a record USD 14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies.

The value of deals in the US jumped 54%, to USD 26.1 billion, with the largest portion of US funding going to lending startups and those in payments, each accounting for 26% of the total, while insurtechs took in another 18%. The country’s largest deal was the USD 1 billion that consumer finance fintech Figure Technologies secured from a credit facility in May 2019.

In the UK, fintech investments rose 63%, to USD 6.3 billion — almost the same as the total for 2018 and 2017 combined. Other European markets also made big strides, with investments in German fintechs up 83% in 2019, to USD 1.5 billion, and fundraising in Sweden jumping more than seven-fold, to USD 1.3 billion from about USD 175 million.

The value of deals in Brazil nearly tripled, to USD 1.6 billion, making the country the world’s fifth largest fintech fundraising centre.

Fintech deals in China dropped 92% in 2019, to USD 1.9 billion, with the USD 145 million financing from insurtech Shuidi Huzhu in June 2019 being the country’s largest transaction.

However, there were large fundraising gains elsewhere in Asia Pacific. Investments in India nearly doubled, to USD 3.7 billion, making the country the world’s third largest fintech market. The value of deals more than doubled in Singapore, to USD 861 million, and rose nearly 50% in Australia, to USD 1.1 billion.

Challenger banks see strong growth in fintech investments

Investments into challenger banks more than tripled in 2019, to USD 5.2 billion from USD 1.6 billion in 2018, led by the USD 726 million raised by Italian digital bank and card processor Nexi, the USD 683 million from South Korea’s NAVER Financial, and the USD 700 million that Chime raised in two separate transactions in the US.

In Brazil, investors poured US$400 million into the country’s largest fintech, Nubank, and USD 344 million into rival Banco Intermedium. In addition, Germany’s N26 raised USD 470 million from two separate deals, and UK neobanks Monzo and Starling Bank raised USD 144 million and USD 211 million, respectively, the latter from two separate transactions.

Investments into payments startups and lending startups took the bulk of global fintech fundraising, accounting for 28% and 25% of the total, respectively, while insurtechs raked in 13%.

The number of fintech deals globally rose 6.8% in 2019, to 3,472, another record level. However, this was the slowest growth rate in nine years, suggesting that activity in more-mature markets might be levelling off just as it gains steam in emerging fintech centres.

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Keywords: challenger banks, fintechs, banks, insurtech, investment, Nexi, Ant Financial, Figure Technologies, NAVER Financial, Chime, study, Accenture
Categories: Banking & Fintech
Countries: World
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