Wealthtech scores record number of deals in Q2 2017

By Daniel Lanyon on Monday 24 July 2017

Alternative LendingDigital BankingSavings and Investment

The market for disruptive wealth management is booming if these numbers are anything to go by.

The wealth management market is under enormous change with tiny start-ups, employing the latest technology, leading the shift to new investment platforms and culture in the industry.

Wealthtech, the term often given to the disruptive part of the personal savings and invesmtent market, saw 166 deals across Q2 2017, a record quarter for deal activity in the sector, according to data provider Fintech Global.

UK-based challenger bank Atom Bank received the most investment of any Wealthtech company in the first two quarters of 2017. The firm’s $140m funding was separated across two deals, the first being a venture round valued at $102m led by BBVA in early March, and the second coming in late-June in the form of debt financing courtesy of British Business Bank Investments.

Fellow UK challenger bank Monzo also features, having received a $27.4m Series C round in February. Other firms to feature include Canadian robo-advisor Wealthsimple – another company to have received funding on multiple occasions this year.

Europe leads the way with five companies amongst the top ten, followed by North America with four, leaving personal finance company Wacai the solitary Asian representative.

However, the second quarter was unable to top the $753.5m-worth of funding seen in Q4 of last year. 2017’s second quarter saw Wealthtech grow in both overall investment and deal activity when compared with Q1 2017, with a rise of 26.5 per cent and 78.5 per cent, respectively.

The biggest deal in the last quarter was received by Palo Alto-based Robinhood. The retail stock trading firm’s $110m Series C funding round was three-times larger than the second-biggest deal in the period. Robinhood’s investment round was led by DST Global with NEA, Thrive Capital, Ribbit Capital, Index Ventures, and Greenoaks Capital participating as co-investors.

The first half of 2017 has already seen more deals and funding than the whole of 2014. The first two quarters of the year had 181 deals, one extra than 2014’s, and over $30m additional funding.

H1 2017’s 181 deals is over two-thirds of the total seen in the whole of last year, which was a record year for the sector. If the pace of deal activity carries on in the second half of the year 2017 can set a new high for most Wealthtech deals.

The average deal size for the first half of the year was $5.4m, just above the lowest yearly average in the period of $5.2m seen in 2014. H1 2017’s average is 37.2 per cent lower than last year’s, making this year’s chances of becoming another record-breaking year in terms of funding less likely.

The largest WealthTech investment of 2016 was received by Shanghai-based U51.com, in a $310m Series C round. The U51.com deal is almost three-times higher than the single-largest deal of this year so far, meaning at the moment deals have been more frequent than last year, but smaller in size.


This article was originally published on www.roboadvicenews.com.

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Companies in this Article:

British Business Bank
Atom Bank
Index Ventures