‘Overall investment in fintech cos up 35%’

By: | Published: August 18, 2016 6:06 AM

Funding to venture capitalist-backed companies operating in the financial technology (fintech) space across the globe dropped by as much as 49% year-on-year in the June quarter to $2.5 billion

Funding to venture capitalist-backed companies operating in the financial technology (fintech) space across the globe dropped by as much as 49% year-on-year in the June quarter to $2.5 billion across 195 deals, reports fe Bureau in Mumbai.

Overall investment in the fintech space, at $9.4 billion, was around 35% higher than in the same quarter last year, consulting firm KPMG said in a report on Wednesday. This was primarily due to China-based Ant Financial raising $4.5 billion through Series B funding during the quarter.

KPMG said that given the surge in investment in the fintech sector last year, it is most probably seeing some sort of plateauing. Concerns surrounding high valuations of companies, a dearth of IPO exits and certain macro-economic factors have resulted in investors turning more cautious.

Geographically, North America got the lion’s share of all investment in the fintech space ($1.3 billion), accounting for more than half the total global funding. However, a year-on-year comparison showed that the region itself witnessed a decline in funding during the quarter under review.

On the other hand, Europe experienced a slight pick-up in investments in the June quarter, not in the least because of the additional activity in the German fintech space.

Gr7

Excluding the Ant Financial deal, Asia too saw a decline in funding given to venture capitalist-backed fintech companies.

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