Global Fintech: 48 Unicorns, Dozens of Megarounds and Disruptive Challenger Banksby Anna Khrupa on December 11, 2019
Fintech is no longer a buzzword, but extremely fast-growing industry. According to KPMG, Fintech funding grew to $111.8 bln last year compared to $50.8 bln in 2017. Many companies that started as small startups have turned into influential Fintech leaders that make their own investments and expand their business all over the world. Learn the most important trends in Fintech that will help you to stay up to date.
The big picture
Tech market intelligence platform CB Insights has published the report Global Fintech Report Q2 2019. One of the major takeaways in the study is the growth of funding for the Fintech industry. The report says that the global Fintech investment reached $8.3 bln due to a record number (25!) of megarounds – deals of $100mln or more.
According to CB Insights, Latin America has become one of the most fast-growing regions in terms of investment. With 23 deals worth $481mln Latin America surpassed both India and China, the study says.
In spite of funding surge, global deal activity fell drastically. For example deal activity on a quarterly basis in North America and Asia dropped 21% and 39% respectively. The number of deals in Europe fell slightly – from 110 in the first quarter of 2019 to 107 in the second quarter of 2019. European companies raised $1,550.6 mln compared to $1,715.8 in the first quarter of 2019.
The study also reveals some interesting facts about the investment dynamics in big Asian countries. In the second quarter of 2019, India surpassed China in terms of deals – 23 deals in India compared to 15 deals in China. Fintech funding in India grew from $286 mln to $350 mln on a quarterly basis. And Fintech funding in China grew from $231 mln in the first quarter of 2019 to $375 mln in the second quarter of 2019.
According to the report, the clubs of Fintech unicorns continued to grow. In the second quarter of 2019 7 new fintech unicorns appeared – Lemonade, Marqeta, Carta, Bill.com, Ivalua, Liquid and Checkout.com. For now there are 48 fintech unicorns in the global fintech industry with the total worth of $187 bln, the study says.
Among the most important trends in Fintech analysts also mentioned the rise of so-called challenger banks or branchless digital banks. According to the study, customers have opened over 30 mln accounts with these financial institutions. Challenger banks raised $649M across 17 deals in the second quarter of 2019. It is noted that year-to-date funding in 2019 has already surpassed 2018’s record – $2.3B. Moreover, in the third quarter of 2019 Brazilian challenger bank NuBank raised a $400 mln at a $10 bln valuation.
Another important trend is the regulation. Although regulators are usually considered to be an obstacle to the development, some of them have already recognized the benefits of Fintech for the economy. According to the report, European regulations help Fintech companies that develop bank APIs to comply with open banking. total worth of $187 bln, the study says.