Global fintech funding has failed to recover from 2015 high

By Emily Nicolle on 15th February 2018

FintechChallenger Banks

However despite 2016's funding flop, fintech has managed to keep its pace for another year.

Global fintech funding has failed to recover from 2015 high

However despite 2016's funding flop, fintech has managed to keep its pace for another year.

Funding for fintech companies surpassed $31bn in 2017, falling in line with the level of investment seen the previous year but still much lower than 2015’s intake.

According to KPMG’s latest report, overall expectations for fintech to “bounce bank” from low funding numbers in 2016 were not met last year, despite some sectors showing promising growth. Insurtech and blockchain saw record levels of VC investment, gaining $2.1bn across 247 deals and $512m across 92 deals respectively.

When analysed by region, the United States was responsible for almost half of the entire year’s funding. Fintechs in the US raised over $15.2bn in 2017, with mergers and acquisitions forming the majority of this total at $8.7bn.

Across the pond, Europe reached a total of $7.4bn after securing a record achievement of $960m in VC investment for the year. Despite receiving $10bn of funding in 2016, Asia saw a major fall, only taking in $3.85bn for all of 2017 as a result of decreased investment in China.

Private equity was on the up however, successfully closing 139 deals in 2017 and ending $17bn in investment. The report also noted corporate participation in VC deals rising to 19 per cent, despite the amount actually provided in funding falling to $5.4bn from $9.6bn in 2016.

As noted in other reports last week, the UK saw a large increase in VC funding over 2017 after overtaking China to take second place globally, just behind the US. VC investment into UK fintech was up 153 per cent, raising a total of $1.8bn across 224 deals.

Global co-lead for KPMG Fintech, Murray Raisbeck, commented: "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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