LONDON, England – A deeper look into the venture capital investments in Fintech suggests that the gradual increase witnessed since 2014 has now shown a spurt in 2017.
In the first three quarters of 2017, 455 investment cases have been announced for bands above $5 million, marking a surge of 23 percent over the average annual 369 investments for the preceding 3 years. On the other hand, the sub $5 Million segment witnessed a drop of 22 percent in the number of investments this year over the corresponding period.
While analyzing the VC activity in 2017, GlobalData has observed an interesting trend with regard to the split between the newly funded companies and those receiving multiple rounds. Funding for the companies receiving multiple rounds has dropped to 4 percent in 2017 as against 13 percent earlier, indicating the rising potential for new investments in this domain.
“It is evident from the rise in investments that a lot of new ideas are getting funded in fintech space, thereby offering good scope of innovation and disruption,” said Ameet Phadnis Research & Analysis Director for Financial Services at GlobalData.
Although VC investments in the Fintech space in Q3 2017 have dropped by 7 percent in value terms over Q3 2016, the average deal size has surged by 26 percent to $19 million from $15 million, clearly reflecting rising investor confidence.
The study has shown some interesting changes in the geographic spread. Unlike 2014, the investment has gradually spread across the globe.
Phadnis adds: “The other markets are steadily grabbing share from the US, thereby reducing its dominance from nearly 60 percent share in 2014 to about 43 percent in 2017.”
The share of APAC and Europe in 2017 has increased to 23.5 percent and 24.5 percent respectively over their figures of 14.2 percent and 18.8 percent, in 2014.
Information based on GlobalData’s Smart Money Analytics database