By Ryan Weeks on Thursday 12 October 2017
Beauhurst data shows that digital banks have attracted the largest fundraises within the broader fintech sector.
Recent data from from research firm Beauhurst has brought the fintech investment landscape into sharper focus. The data, which is represented by an infographic below, divides fintech into six core areas: challenger banks, peer-to-peer lending, payment processing, robo-investment, blockchain and insurtech. The data runs from January 2011 up to the end of 2016.
Of the six segments identified, payment comanies have seen by far and away the most deals, at 140. Challenger banks boast by some way the largest average raise at £16.8m, and also the largest average valuation at £31.9m. This is perhaps indicative of how capital intensive starting a bank from scratch can be.
The losses of banking disruptors such as Revolut and Monzo have been well documented – as, to be fair, has their ability to attract customers. Monzo raised £22m earlier this year, shortly followed by a £54m round from rival Revolut. Both rounds were led by well-known venture capital firms, and subsequently topped up with equity crowdfunding investments of £2.5m and £4m respectively. These rounds occurred outside of the date range of the data represented in Beauhurst's infographic.
In most respects, insurtech and blockchain sit at the bottom of Beauhurst’s rankings, which is reflective of the relative youth of each segment. Robo-advice firms have not produced many fundraises, but enjoy an average valuation of £26.1m, compared to just £6m for blockchain firms, and £7.94m in insurtech.
P2P firms accounted for 59 fundraises, second only to payment companies, with an average raise of just £3.94m. This is perhaps indicative of a saturated market – especially given the relative youth of P2P in relation to the payments industry. Prognosticators have long suggested that the peer-to-peer lending market is long overdue for a period of marked consolidation.
Beauhurst says that its data points to a clear upward trend in fintech investment over time. This is represented by the second graphic below.