The first quarter of 2016 has been quite good for Fintech companies all round, as US$5.7bn has been invested in this sector. After the disconcerting funding results for Q4 2015, this is a significant improvement, which is cause for great relief.
Positive Signs For Fintech Funding
Comparing the numbers to the final quarter of 2015, it appears as if there is a renewed interest in Fintech. Particularly where the VC-backed funding is concerned, numbers rose from US$1.9bn in Q4 2015 to US$4.9bn in Q1 2016. This is more than double the amount in a three-month time span, signaling a renewed interest in finding Fintech unicorns.
What is even more impressive is how there were over a dozen US$50m+ rounds of funding in the Fintech sector during the first quarter of 2016. While this helps push up the numbers by quite a margin, it is only a slight rise compared to last year’s final quarter. Additionally, this is still far away from the 18 US$50m+ funding rounds in the first quarter of last year.
Asia seems to be the next hot market for Fintech companies and entrepreneurs. With the investment numbers more than quintupling in three months’ time, Asia is positioning itself as a hub for Fintech innovation. JD Finance and Lu.com are the main reasons for this success, though, as they each drew in over US$1bn in funding. Most of this volume is coming from China, which will not surprise too many people.
In Europe and North America, things are looking positive once again. While the number of Fintech deals increased in Europe – but not funding – their North American counterparts saw an increase in financing. If these numbers continue to add up over the next few months, North American Fintech companies may set a new high as far as Fintech deals are concerned.
As is the case with every quarterly funding report, there are clear market leaders who want to be involved in as many companies as possible. Blockchain Capital is an attractive VC firm to keep an eye on, as they are focusing on Bitcoin technology and blockchain startups. Since both of these markets are an integral part of Fintech, it makes sense to see them move up the funding presence ranks.
Last but not least, there seems to be a fair bit of VC funding flowing into Brazilian Fintech startups these days. Nubank, Mercado Eletronico, GuiaBolso, and BankFacil have all completed their seed funding and growth equity rounds over the past year. This is another interesting area to keep an eye on over the next few years.
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