- Paul Menchaca
Report: Global VC-Backed Fintech Funding Set For Record High in '17
After a sluggish Q1, global venture capital-backed funding of fintech companies rebounded to the tune of of $5.2 billion raised across 251 deals in the second quarter, according to the latest report from data provider CB Insights.
In fact, CB Insights notes that global VC-backed investments in fintech companies are on pace to rise 19% from 2016, which would surpass the all-time high set last year. Funding rose 83% on a quarterly basis, owed largely to several mega-deals.
However, while the global funding for fintech companies is likely to hit record highs this year, VC-backed dealmaking in the U.S. is falling. With $1.9 billion in investments across 96 deals, funding to fintech companies in the U.S. is on pace to grow 11% on a year-over-year basis, but deals to fintech companies could drop 15% from 2016 at its current rate, according to CB Insights.
Putting more context in the discrepancy between funding and deals for U.S. fintech companies, via CB Insights: The 96 deals to VC-backed companies in the U.S. fell to a five quarter low, but the $1.9 billion in funding represented a five quarter peak. The funding was led by mega-round investments to new unicorns Robinhood, Symphony, Clover Health and AvidXchange.
Here are some other key data points from CB Insights:
Although falling off a bit in Q2, fintech investments in Europe remain poised for a big year: With 56 deals worth $500 million, European fintech investments are on pace to hit 270 deals and exceed $2.8 billion for the year.
With five new unicorns added in Q2, there are now 26 fintech unicorns globally valued at $83.8 billion.
Fintech funding in Asia continues to soar, topping out at $2.7 billion for the quarter. Approximately 40% of Asia’s fintech funding during the first half of the year comes from SoftBank’s $1.48 billion investment in One97, which is the parent company of Paytm, the India-based payments behemoth.
CB Insights’ latest report also shows that funding to VC-backed New York fintech companies rebounded in Q2 after a drop in the first quarter, growing 19% on a quarterly basis. Meanwhile, deals for California fintech companies fell for the third straight quarter and 18% from the Q2 in 2016.
However, while funding dipped 3% for the quarter, funding for California fintech companies surpassed $700 million for the second straight quarter. Four of the Q2’s top 10 fintech deals were also for California-based companies.
Photo: Getty iStock