Global investments in fintech companies across both venture-backed and non-venture-backed companies totaled $9.4 billion in the second quarter of this year, says a report.
However, investment directed to VC-backed fintech (financial technology) startups fell 49 per cent, the report said.
According to the Pulse of Fintech, the quarterly global report on fintech VC trends published jointly by KPMG International and CB Insights, despite this decline, VC investment in fintech is on pace to exceed 2015 results.
“Despite VC-backed funding to fintech decreasing in Q2, overall fintech funding remains on track to surpass 2015 levels,” says Ian Pollari, Global Co-Leader of Fintech, KPMG International.
Funding and deal activity to VC-backed fintech companies in the first six months of 2016 are on pace to hit $14.8 billion across more than 820 deals by the end of 2016 at the current run rate.
Asia saw VC-backed fintech companies raise $0.8 billion across 46 deals in April-June 2016 – a funding decline of 71 per cent from the first quarter of this year primarily due to the lack of major mega-rounds.
Commenting on the findings, CB Insights CEO Anand Sanwal said: “The decline in fintech financing and deals is in line with what we’re seeing in the broader venture environment for startups, as VCs as well as crossover investors are pushing back harder on profitability and business model concerns.
“Despite the funding drop, previously under-invested areas of fintech such as an insurance area are gaining strong momentum among venture investors across geographies.”
Meanwhile, India market continues to see action.
Neha Punater, Partner and Head of Fintech, KPMG in India said, “VC investment in fintech remains strong in India. While the total dollar value of investment has declined due to absence of mega-rounds this year, the number of deals remains consistent with 2015 levels.
“We continue to see investment in key areas such as payments and mobile wallet as well as increased momentum in emerging areas like robo advisory,” Punater added.