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Fintech unicorn ‘herd’ swells its ranks

The global economy may be precarious, but investors keep pushing up valuations for scaleups looking to up-end financial services.

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Global fintech funding in the first three-quarters of 2021 has nearly doubled 2020’s year-end total reaching $91.5bn, according to data from CB Insights.

The boom in funding came after a particularly strong quarter for venture capital as investors put money to work in startups at a faster rate than in any other quarter on record. 

The surge of investment is being powered by $100m+ ‘mega’ rounds for scale-ups. There was a 136 per cent increase in the number of rounds in this category, up from 173 to 439.

In total there was $158bn of funding in Q3, according to CB Insights data, up 105 per cent vs the previous year’s Q3 total of $77bn. 

The last 2 quarters are the first and second-best quarters in terms of total venture funding in the last decade before this.

As a result of the boom in funding, there were 42 new fintech births in the third quarter of 2021, making 200 in total. One in three (33 per cent) of all total new unicorns in the quarter were fintech-focused.

Of the ten largest unicorns in the third quarter of 2021, four were fintechs. Stripe,Revolut,Klarna and Nubank.

In total, the global unicorn herd reached 848 in Q3 of 21, following 127 $1bn+ valued private companies being added to the increasingly long list, or a 58 per cent year-on-year increase.

Who are the biggest investors in fintech?

The top fintech investors over this period were Tiger Global Management, which participated in 24 funding rounds, and Coinbase Ventures which put cash into 22.

Tiger's investments in 2021 included Revolut,Brex, Scalapay and Truelayer.Coinbase Ventures meanwhile has backed FTX, CoinSwitch and  Mobilecoin.

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