Fintech Investments

VC-Backed FinTech Doubled In 2015 — Despite Q4 Slump

The FinTech world can be divided between public and private companies. Publicly traded companies have had a tough time the last several months. Key fallen stars have included Lending Club and OnDeck Capital, which Bloomberg noted have fallen by more than 40 percent since their debuts as publicly traded companies.

But private companies have had a better time of it, and the newswire reported on Wednesday (March 9) that, as calculated by KPMG International and CB Insights, "private funding flowed relatively freely” into the FinTech realm last year, with startups quite happy to stay out of the public markets.

The research data shows that total investments in the FinTech space were up more than 100 percent, to as much as $13.8 billion last year, with the deal count coming to 653 from 586 in the previous year. Funding came primarily from private equity and venture capital firms, as well as mutual funds.

‘The largest deals in the year came from several rounds of financing tied to the same companies: Social Finance grabbed more than $1 billion, Zenefits was able to raise more than $500 million and Prosper Marketplace got $165 million.

The activity was actually lower toward the end of the year amid investor skittishness and market volatility. The two firms conducting the research, said Bloomberg, did not see a prolonged drop. "This drop was likely a reflection of growing caution across all areas of VC investment, rather than a concern with FinTech in particular," they wrote. "While caution is expected to continue to be a trend over the next few quarters, FinTech interest is not likely to be held back for long." Rebounds in other companies that had dipped below their offering prices (such as Square) may help show resilience in the sector. There have also been incidents of startup investments coming from the larger firms on Wall Street, including Goldman Sachs.

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