Global fintech funding tops US$31B for 2017 -- fueled by US$8.7B in Q4: KPMG’s Pulse of Fintech Report
Strong investment of US$8.7B in Q4’17 propelled global fintech funding over the US$31B mark for 2017, sustaining the high level of investment seen in 2016. This brings the total global investment in the fintech sector over the past three years to US$122B. While global fintech deal volume declined in Q4, the number of VC transactions exceeded 1,000 for the fourth consecutive year in 2017, with PE deals reaching a new high of 139. Fintech M&A also ticked up for the year with 336 transactions in 2017.
Among fintech sub-sectors, both insurtech and blockchain saw record levels of VC investment and deal volume in 2017, with insurtech accounting for US$2.1B across 247 deals and blockchain generating $512M of investment across 92 deals.
Geographically, the US saw almost two-thirds of global fintech investment in Q4’17, with $5.8B in funding raised, and almost half of the 2017 global total, with US$15.2B raised for the year. M&A accounted for the majority of this funding, with US$8.7B in deals in 2017. US PE funding in Q4’17 achieved its second highest quarter ever at US$3.4B.
Fintech investment in Europe reached over US$2B in Q4’17, with VC investment achieving a new record of US$960M – while total investment for 2017 reached US$7.44B. In Asia, fintech investment moderated to US$748M for Q4’17, to reach only US$3.85B for all of 2017, after more than US$10B in funding in 2016.
“The global fintech market has advanced considerably over the past few years,” says Ian Pollari, Global Co-Lead, KPMG Fintech. “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.”
Key 2017 Annual Highlights
Key Q4’17 Highlights
US dominates global fintech investment; Brazil starts to make waves
Fintech funding in the Americas rose slightly quarter-over-quarter, with US$5.9B invested across 168 deals. In total for 2017, the Americas saw US$19.8B invested across 711 deals.
While the US accounted for the lion’s share of fintech investment, with US$5.8B invested across 149 deals during Q4’17, Brazil had an excellent showing, with a US$50M raise by Creditas breaking into the top 10 fintech deals in the region.
Europe VC fintech investment reaches new high for third straight quarter
After a solid US$1B+ quarter in Q3’17, total fintech funding in Asia declined to US$748M across 38 deals in Q4’17. VC funding faltered considerably in the region, dropping almost 50 percent quarter over quarter to US$550M. Decreased fintech investment in China accounted for much of the decrease in investment in Asia. China saw just US$45.8M in investment in Q4’17, while total investment in 2017 was US$1.33B.
On an annual basis, total fintech funding in Asia was US$3.85 billion in 2017 – a massive drop-off from the more than US$10B invested in 2016. On the positive side, corporate participation in fintech deals skyrocketed in Asia during Q4’17, rising from a twelve-quarter low of 11 percent in Q3’17 to reach a new high of over 31 percent.
“The fintech market is continuing to expand and evolve,” says 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.”
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