Investment in financial technology (fintech) ventures rose sharply in most major markets in 2019, led by gains in the U.S. and U.K. and emerging economies such as India and Brazil, according to Accenture analysis of data from CB Insights, a global venture-finance data and analytics firm.
Despite those gains, the total value of fintech deals globally dipped 3.7%, to USD 53.3 billion from USD 55.3 billion in 2018, when totals were boosted by a record US$14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies.
The value of deals in the US jumped 54%, to USD 26.1 billion, with the number of transactions rising 6.9%, to 1,232, signaling that investors remain confident about the future growth and demand for innovative digital solutions for banks, insurers and payments providers. The largest portion of U.S. 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 US$1 billion that consumer finance fintech Figure Technologies Inc secured from a credit facility in May.
In the UK, fintech investments rose 63%, to USD 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 US$1.5 billion, and fundraising in Sweden jumping more than seven-fold, to USD 1.3 billion from about USD 175 million.
The value of deals in Brazil nearly tripled, to USD 1.6 billion, making the country the world’s fifth-largest fintech fundraising center.
Fintech deals in China dropped 92% in 2019, to USD 1.9 billion, with the USD 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 USD 20 billion.
However, there were large fundraising gains elsewhere in Asia Pacific. Investments in India nearly doubled, to USD 3.7 billion, making the country the world’s third largest fintech market. The value of deals more than doubled in Singapore, to USD 861 million, and rose nearly 50% in Australia, to USD 1.1 billion.
“Despite strong demand for fintech globally, it’s likely that, as startups become more mature, investments will flow to fast-growing economies, where there’s still a huge, unaddressed consumer and corporate market thirsty for innovations,” said Julian Skan, a senior managing director in Accenture’s Financial Services practice. “For now, there’s still a lot of growth, particularly for challenger banks that are expanding in their home markets and overseas, as well as for payments providers that are embedding solutions seamlessly into our day-to-day activities.”