Recent years have witnessed a surge in the number of fintech investments, with record funding levels and rising valuations. However, the coronavirus outbreak altered that, causing a significant decrease in the overall venture capital deals, changing funding conditions, and creating uncertainty for many fintechs.
Cumulative Funding Reached $114.7bn in Q3 2020
Even before the COVID-19 pandemic, access to funding was already becoming difficult for some fintechs. Many investors focused on established companies with clear business models instead of investing in early-stage businesses.
In 2015, fintech companies raised $9.5bn, with the cumulative funding reaching $13.2bn at the end of that year, revealed the CrunchBase data. In the next twelve months, this figure doubled and jumped over $27bn. In 2017, fintech raised another $17.2bn in funding rounds, with the combined value of investments reaching $44.3bn in the fourth quarter of that year.
Statistics show that 2018 delivered a record number of investments in the fintech industry, with the cumulative funding raised over time reaching $77.9bn, a $33.6bn increase in a year. The increasing trend continued in 2019, with another $25.4bn worth funding rounds.
The CrunchBase data revealed that by the end of the first quarter of 2020, the cumulative value of investments in the fintech industry reached $107.9bn. During the first three months of the year, fintechs raised $4.6bn, the same amount as in the first quarter of 2019.
However, due to the coronavirus crisis effects, the second quarter of the year witnessed a negative trend. Statistics indicate that between March and June, fintech companies raised $4.3bn in funding rounds, a 36% plunge year-on-year. In the third quarter of the year, the cumulative funding amount reached $114.7bn value.
Techstars, Y Combinator, and 500 Startups as the Leading Investors
The CrunchBase data also revealed that Techstars represents the most active investor in the fintech market. The Colorado-based global platform for investment and innovation took part in 183 funding rounds so far.
Another US-based seed money startup accelerator, Y Combinator, ranked second on this list with 164 funding rounds. Statistics show that 500 Startups represents the third most active investor in the fintech market. The San Francisco-based global venture capital firm participated in 140 funding rounds, so far. Plug and Play, QED Investors, and Anthemis Group follow with 81, 60, and 59 funding rounds, respectively.
Analyzed by geography, North America represents the leading region with $44.1bn worth investments in fintech startups. Statistics show the US fintechs raised 95% of that value. Asia ranked as the second-leading region with $51.3bn of investments. European fintech startups follow, with $15.1bn, respectively.
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