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Chinese Investors Flock To Technology And FinTech Startups

by on January 1, 2016
 

China seems to be betting big on the future of FinTech, as the amount of funds invested into technology as a whole reached a record height. Compared to 2014, the total amount invested has increased by 217%, and there is no indication of this trend slowing down anytime soon. FinTech plays a major role in the future of our society; that is a fact no one can deny. But what are these Chinese investors most excited about so far?

Also read: When Internet of Things and FinTech Collide – Part V: Maturity

The Era of Technology and FinTech Is Here

Technology investments will help shape the future of the FinTech sector, and vice versa. China seems to be betting big on the future of technology to affect a variety of aspects of everyday life. With the total amount invested in technology increasing from US$11.3bn in 2014 to US$35.96 in 2015, something good is bound to happen over the next few years.

Rather than investing this money in established companies, China sees the benefits of younger companies and startups to push technology evolution and adoption to new heights. Seed funding for new and innovative ideas has received a notable upward nudge, although Series A Funding takes the crown with a near 600% jump compared to last year.

That being said, most of the money exchanging hands came from Chinese investors supporting companies looking at Series B funding. What is most interesting about these statistics is how both venture capitalists and tech giants backed high-growth startups. This goes to show even established technology players are keeping a close eye on the advancements made by the competition, including FinTech startups.

Overall, the startup scene has seen a lot of love and positive attention from Chinese investors in 2015. As one would come to expect, there are certain industry sectors more appealing to investors right now, such as e-commerce. Consumers all over the world enjoy their shopping experience, whether it is through a browser or mobile application.

Plenty of Growth Left For FinTech In China

At the same time, this growing demand is a source of major cyber security concerns. Mobile devices are a favorable target for hackers for malware attacks, and computers suffer from the same level of unwanted attention. This is where FinTech companies can play a big role, as making the online commerce experience more secure will help drive sales.

Keeping in mind how online spending represents nearly 16% of all sales in China already, there are plenty of opportunities to be found in this market. Industry experts this percentage to go up to well above 25% by 2017, creating a window of opportunity for FinTech companies to stake their claim in the field of online shopping technology.

A growing demand for online shopping solutions puts a strain on the existing logistics companies in China as well. FinTech startups can help in that regard as well, as the sharing economy has spawned several business models for companies to outsource logistics and delivery of items in cities. It only seems logical to expect more FinTech startups to explore the logistics side of things in the future.

What are your thoughts on the growing amount of money invested in the technology sector by Chinese investors? How will this affect the evolution of FinTech? Let us know in the comments below!

Source: Tech In Asia

Header image courtesy of Shutterstock

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