Investment in Australia’s fintech sector smashed previous records in 2019, jumping up 252 percent to US$1.913 billion, spurred by the acquisition of Property Exchange (PEXA) and the US$280 investment in neobank Judo – with Australia bucking the global investment trend, which saw 2019 fall just shy of 2018’s record with US$135.7 billion invested across 2,693 deals.
Notable venture capital deals in Australia included neobank Athena’s US$43.4 million Series C round, Grow Super’s US$11.8 million Series B funding round and Cover Genuis’s US$10 million Series C round.
2019 was a break-out year for Australia’s fintech ecosystem, with large-scale M&A activity driving the result alongside significant VC investment in emerging players. There is a depth of innovation across multiple areas of fintechs, including banking and lending, proptech, insurtech and superannuation – and this is increasingly being recognised by investors and corporates.
2020 is going to be an exciting and pivotal year for fintech, particularly as we start to see the impact of the digital banking licensees in Australia, Hong Kong (SAR), and Singapore launching and endeavouring to scale, as well as other markets following suit. In addition, a number of companies from outside of financial services are working to get into parts of the financial services value chain – either directly or through partnerships – and they’re going to blur the lines of financial services even more. As a result, we expect to see bolder responses from incumbent financial institutions in terms of partnerships, as well as strategic investments and M&A.
Over the past year, the lines have really started to blur between financial services and non-financial services – with fintech companies helping to bridge the gap. In many ways, the main theme for 2019’s Australian fintech market was diversity – with fintech investment expanding across product, sector and geographic borders. Australia punches above its weight when it comes to financial services innovation, and the increasing reach and interconnectivity of our local fintechs is attracting increasing VC attention. It’s a trend that will only continue into 2020.