admin NEW YORK: According to research by data provider CB Insights, Venture capital-backed financial technology companies hit a record $39.57 billion from investors all over the world in 2018, up 120 percent from the previous year. Also it states, Funding was increased through 1,707 deals, up from 1,480 in 2017, stated in the research. The surge in funding was due in large part to 52 mega-rounds, or investments larger than $100 million, which were worth $24.88 billion combined.
As per the research, A $14 billion investment in Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba Group Holding Ltd, accounted for 35 percent of total fintech funding alone last year.
In the earlier three months of 2018, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These involve credit card provider Brex, digital bank Monzo and data aggregator Plaid.
Venture capital investors have been investing billions of dollars into fintech companies, in the hopes that they can increase the market share from incumbent financial institutions by providing easier to use and cheaper digital financial services.
Fintechs have appeared globally across all sectors of finance, involving lending, banking and wealth management. While the large rounds minted new unicorns and led funding to raise a record high in 2018, CB Insights estimates these will likely delay initial public offerings.
According to the study, “IPO activity is likely to remain lackluster in 2019,” the research reads. “Asia saw the biggest jump in number of deals in 2018, growing 38 percent from the previous year and accounting for a record $22.65 billion.”
In the United States, fintechs hit a record $11.89 billion through 659 investments, while the number of deals fell in Europe, but funding reached a record $3.53 billion.
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