Total global fintech funding remains strong, with US$8.2 billion invested in Q3, after more than doubling to US$9.3 billion in Q2, according to a KPMG report.
Although deal volume declined, Q3 investment stood well above the US$6.3 billion raised in Q3. Venture capital (VC) investment in fintech saw a five-quarter high of US$3.3 billion.
“The fintech market continues to rapidly evolve with an increasing diversity of funding participation and sources, geographic spread and areas of interest,” says Ian Pollari, global co-lead, KPMG Fintech.
He adds, “We are seeing the emergence of fintech leaders who are looking to expand internationally to scale their platforms, as well as large technology giants moving into adjacencies to create new value for their customers. This is a trend that is expected to continue and could force incumbent financial institutions to take bolder steps in response.”
Here are some more highlights.
- The median deal size for angel/seed stage deals at the end of Q3 stood at US$1.4 million – up from US$1 million in 2016, while the median deal size for early stage rounds was also up to US$5.5 million from US$5.1 million in 2016. The median deal size of late stage deals was even year over year at US$16 million.
- The U.S. led global fintech investment during the quarter, with US$5 billion deployed across 142 deals.
- Europe and Asia lagged behind the U.S., with Europe fintech deals accounting for US$1.66 billion of investment across 73 deals, and Asia accounting for US$1.21 billion across 41 deals.
- While overall corporate VC funding has declined so far this year, the participation rate remains high. Corporates have participated in 18% of all fintech VC deals globally year to date.
- Fintech venture-backed exit activity skyrocketed in Q3, almost tripling quarter over quarter from US$270 million to US$940 million. This reflects the second-best quarter on record for fintech exits.
- Insurtech VC deals and investment are on track to reach record highs by end of the year. By the end of Q3, more than US$1.5 billion had been invested by VCs in insurtech across 179 deals, compared to US$1.8 billion across 203 deals in all of 2016.