Global fintech funding goes over $31bn mark
Go globe! A strong investment of $8.7 billion in Q4 2017 propelled global fintech funding over the $31 billion mark for 2017 – bringing the total over the past three years to $122 billion.
According to the KPMG “Pulse of Fintech” report, while global deal volume declined in Q4, the number of venture capital (VC) transactions exceeded 1,000 for the fourth consecutive year in 2017, with private equity (PE) deals reaching a new high of 139. M&A also ticked up for the year with 336 transactions in 2017.
Among sub-sectors, both insurtech and blockchain saw record levels of VC investment and deal volume in 2017, with insurtech accounting for $2.1 billion across 247 deals and blockchain generating $512 million of investment across 92 deals.
Ian Pollari, global co-lead, KPMG Fintech, says: “As the sector matures, investors have shifted from experimenting with fintech to seeking out value-driven opportunities. This is particularly true for corporates who continue to invest and see fintech as a strategic play that will help accelerate their digital transformation agendas.”
Geographically, the US saw almost two-thirds of global investment in Q4 2017, with $5.8 billion in funding raised, and almost half of the 2017 global total, with $15.2 billion raised for the year. M&A accounted for the majority of this funding, with $8.7 billion in deals in 2017. US PE funding in Q4 2017 achieved its second highest quarter ever at $3.4 billion.
Investment in Europe reached over $2 billion in Q4 2017, with VC investment achieving a new record of $960 million – while total investment for 2017 reached $7.44 billion.
Despite “ongoing economic uncertainty related to Brexit”, the UK continued to see “resilience” in its market – accounting for $1.6 billion of Europe’s total investment.
In Asia, investment moderated to $748 million for the same period, and reached $3.85 billion for all of 2017, after more than $10 billion in funding in 2016.
Decreased investment in China accounted for much of the decrease in investment in Asia. China saw $45.8 million in investment in Q4 2017, while total investment in 2017 was $1.33 billion.
Funding in the Americas rose slightly quarter-over-quarter, with $5.9 billion invested across 168 deals. In total for 2017, the Americas saw $19.8 billion invested across 711 deals.
Brazil had an “excellent showing”, with a $50 million raise by Creditas breaking into the top ten deals in the region.
Angels without dirty faces
If you still have a stomach for more stats than a maths exam, then keep reading.
The median deal size for angel/seed-stage deals was up to $1.5 million, compared to $1 million in 2016, while the median deal size for early-stage rounds was also up to $5.5 million from $5.1 million in 2016. The median deal size of late-stage deals decreased year-over-year, from $19.1 million to $16 million.
Corporate participation in VC deals reached a record high of 19% in 2017, although corporate VC investment globally was down significantly year over year, with $5.4 billion invested in 2017 compared to $9.6 billion invested in 2016.
You can’t hurry a Murray, so the final word goes to Murray Raisbeck, global co-lead, KPMG Fintech: “So much is happening – from the increasing focus on insurtech and blockchain, to the ramifications of maturing companies, such as challenger banks, looking to expand and grow. With regulations changing, particularly in Europe – 2018 will likely be an exciting year.”