Global Fintech Investment Soars to Record $57 Billion in First Half of 2018
Overall deal volume rose from 834 in the second half of 2017 to 875 deals in the first half of 2018, according to the KPMG Pulse of Fintech report
key highlights of the first half 2018* Global fintech investment (PE, VC, and M&A) more than doubled–from $22 billion in the second half of 2017 to a new high of$57.9 billion in the first half of 2018, buoyed by nine megadeals each valued at over $1 billion. * Europe’s top four fintech deals accounted for $22.4 billion in investment, including the $12.9 billion acquisition of WorldPay Ltd. by U.K.-based Vantiv Inc.
* In the first half of 2018, investment in fintech companies in Asia hit$16.8 billion across 162 deals, an increase from 119 deals in the second half of 2017.
* Fintech VC volume has remained relatively steady since the start of 2015–rising slightly to 653 deals in the first half of 2018.
* Median late-stage VC deal size within the fintech sector rose dramatically–from $14 million in 2017 to$25 million in the first half 2018.
U.S.-based fintechs see a surge in VC funding, surpassing $5 billion in the first half of 2018In the first half of 2018, U.S. fintech companies attracted$14.2 billion in investment, including over $5 billion in VC investment. VC deal volume continued its upward trend, moving from 276 deals in the second half of 2017 to 328 deals in the first half of 2018, driven in large part by resurgent angel, seed, and early-stage VC deals. Investors were quick to invest in new startups in emerging fintech sub-segments, including regtech and investment banking, while continuing to pour money into mature, late-stage companies such as Robinhood–whose $363 million was one of the largest VC deals in the first half of 2018.
Top four deals in Europe total $22.4 billionTotal investment in fintech companies in Europe hit $26 billion across 198 deals in the first half of this year, fueled by substantial deals by WorldPay Ltd., Nets, iZettle AB, and IRIS Software Group Ltd.–which together accounted for $22.4 billion of the European total. However, while deal value achieved a new peak in Europe, deal volume declined, falling from 268 in the second half of 2017 to 198 in the first half of this year.
The U.K. led the way in European fintech investment, with$16.1 billion and five of the top 10 deals in the region, despite possible concerns around Brexit negotiations. Scandinavia’s growing fintech ecosystem was also well represented, with the buyouts of Nets (Denmark), iZettle (Sweden) and Nordax Group (Sweden) among the top ten deals in the first half of 2018.
Asian fintech reaches $16.8 billion–on strength of Ant Financial dealAfter a solid $2billion in the second half of 2017, total fintech funding in Asia surged this year to $16.8 billion across 162 deals, powered by a massive $14 billion Series C VC funding round by Ant Financial. Excluding this megadeal, Asia still saw strong fintech investment, including quarter-over-quarter increases in overall fintech investment in India, Australia, and Singapore.
Following a global trend, median fintech VC late stage deal size in Asia increased significantly during the first half of the year–rising from$25 million to$37.7 million–the highest of any region. Blockchain and AI continued to be key priority areas for fintech investors in Asia, in addition to insurtech and regtech.
Payments and regtech subsectors shineAs one of the most mature sub-sectors of fintech, payments witnessed a number of large exits in the first half of the year including successful IPOs by EVO Payments and GreenSky, Paypal’s $2.2 billion acquisition of iZettle, and Vantiv’s acquisition of WorldPay in the U.K. The regtech sector also got off to a hot start in 2018, with $1.37 billion invested, already surpassing the 2017 total.
Blockchain moving beyond experimentationBlockchain continued to draw a significant amount of attention from investors in the first half of 2018, with investment typically focused on more experienced companies and consortia looking to obtain additional rounds rather than on new market entrants. Large rounds in blockchain companies were seen during the first half of 2018, including $100 million+ rounds to R3 and Circle Internet Finance in the U.S., and $77 million to Ledger in France.
Strong outlook expected for Fintech investmentWith a significant amount of capital waiting to be deployed, a growing diversity of fintechs hubs across the globe, and more and more corporates looking to leverage fintech in order to drive innovation, investment in fintech is expected to remain strong heading into the second half of 2018.
See the full report here.