The number of fintech deals globally rose 6.8% in 2019, to 3,472, another record level.
Fintech investments in India nearly doubled to $3.7 billion in 2019 from $ 1.9 billion in 2018. This puts India as the world’s third largest fintech centre, behind the US and the UK, according to Accenture analysis of data from CB Insights, a global venture-finance data and analytics firm. The number of deals was up slightly to 198 in 2019 from 193 in 2018.
Sonali Kulkarni, MD, financial services, Accenture in India, said, “There’s a lot brewing in India’s fintech ecosystem and steady flow of funds show investors’ confidence in the industry’s future growth potential. The increase both in deal value and the number of deals are good indicators of what’s to come and bodes well for the future development of cutting-edge financial technology in the country.”
Investments into payments companies more than tripled to $2.1 billion from about $660 million in 2018, while funding into insurtechs also rose strongly, up 74% to $510 million. The vast majority of funds raised last year in India went into payments start-ups (58%), while insurtechs raked in 13.7% of the investments and fintechs in lending accounted for 10.8% of the total, the data showed.
One97 Communications, the parent company of Paytm, raised $1.66 billion from two separate transactions, while PhonePe tapped investors for about $210 million from two separate deals and Razorpay raised $75 million. Other large transactions included $282 million PolicyBazaar raised from two deals and $120 million from credit card payments company CRED.
According to the study, the investment in fintech ventures rose sharply in most major markets in 2019, led by gains in the US and the UK and emerging economies such as India and Brazil.
The number of fintech deals globally rose 6.8% in 2019, to 3,472, another record level. However, this was the slowest growth rate in nine years, suggesting that activity in more-mature markets might be levelling off just as it gains steam in emerging fintech centres.For instance, the number of deals grew only 6.9% in the US and 2% in the UK. On the other hand, Asia Pacific saw much higher growth in deal volumes — 11% in Japan, 16% in Australia and 52% in Singapore — as did Europe, with gains of 37% in Germany and 79% in Sweden.
“The healthy growth in activity bodes well for the near-term outlook of the fintech industry, particularly as we see more established players interested in implementing the newest technologies through partnerships with startups, which are also eager to launch their solutions to incumbent financial firms’ large consumer base,” said Piyush Singh, a senior managing director at Accenture who leads its financial services practice in Asia-Pacific and Africa.
However, the value of deals in the US jumped 54%, to $ 26.1 billion, with the number of transactions rising 6.9%, to 1,232, signalling that investors remain confident about the future growth and demand for innovative digital solutions for banks, insurers and payments providers, the study revealed.
The largest portion of US funding went to lending startups and those in payments, each accounting for 26% of the total, while insurtechs took in another 18%. The country’s largest deal was the $1 billion that consumer finance fintech Figure Technologies Inc secured from a credit facility in May.In the UK, fintech investments rose 63%, to $ 6.3 billion — almost the same as the total for 2018 and 2017 combined.
Other European markets also made big strides, with investments in German fintechs up 83% in 2019, to $ 1.5 billion, and fundraising in Sweden jumping more than seven-fold, to $ 1.3 billion from about $ 175 million, it said.The value of deals in Brazil nearly tripled, to $ 1.6 billion, making the country the world’s fifth-largest fintech fundraising centre. Fintech deals in China dropped 92% in 2019, to $ 1.9 billion, with the $ 145 million financing from insurtech Shuidi Huzhu in June being the country’s largest transaction. Most of the decline was due to China’s record-breaking fundraising in 2018, which saw four deals alone bringing in nearly $ 20 billion, according to study.