Financial technology startups were able to raise $39.57 billion in venture funding last year, marking a 120 percent increase from 2017.
Reuters, citing data from CB Insights, reported the funding was on a global basis and was raised via 1,707 deals. The number of deals is also up from the 1,480 in 2017. According to Reuters, the increase in funding was driven by 52 deals that were bigger than $100 million. These so-called mega-deals were worth $24.88 billion last year, noted the report. What's more, a $14 billion investment in Ant Financial represented 35 percent of the total funding in 2018. Ant Financial is the payment affiliate of Alibaba, the Chinese eCommerce giant. The report noted that in the fourth quarter of 2018 five companies became unicorns, which happens when a startup has a valuation of more than $1 billion. The latest unicorns include Brex, Monzo and Plaid, reported Reuters.
On Monday (January 28) Acorns, the FinTech that helps users invest spare change, announced a Series E found of funding that gives it a valuation of $860 million, pushing it nearer to unicorn status. The $105 million investment was led by Comcast Ventures and NBCUniversal and included participation by Bain Capital Ventures, BlackRock, TPG’s Rise Fund, DST and Michael Dell’s MSD Capital. NBCUniversal became Acorns’ largest shareholder, getting a seat on the board that will be filled by CNBC Chairman Mark Hoffman.
In the U.S. FinTechs brought in $11.89 billion in funding in 2018, setting a new record. There were 659 investment deals with FinTechs in 2018. Asia saw the largest increase in the number of deals, with growth of 38 percent in 2018 compared to 2017. Asian FinTech startups raised a record $22.65 billion, while Europe saw a decline in deals but an increase of funding to $3.53 billion, also a record.
At the same time that FinTechs around the globe are drawing a lot of interest as venture capitalists bet they can steal market share from the traditional financial services players, their efforts to become publicly traded companies will likely be delayed.“IPO activity is likely to remain lackluster in 2019,” CB Insights said in the report, according to Reuters.