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Mega-rounds are back in fintech as 12 firms raised investments of more than $100m each.
Fintech funding continues to rise and rise as an investment class with $5.4bn across 323 deals was raised globally in Q1 of 2018.
According to CB Insights’ Global Fintech Report Q1 2018, global fintech activity hit a new record during the quarter.
The US saw the largest boost in deals while Europe saw fintech deal activity dip to a five-quarter low.
South America is already a region to watch as funding raised in the first quarter of 2018 of $271m surpassed the entire funding total for 2017. Funding saw a boost from a $150m mega-round deal for Brazilian mobile banking unicorn Nubank.
Asian fintech funding saw the largest quarterly spike in Q1 2018 on the back of four $100m-plus investments.
However, in Europe, VC-backed fintech companies saw the largest pullback in early-stage investments. Despite this, funding hit a five-quarter high in Europe, bolstered by $100m-plus investments in digital banking start-ups N26 and Atom Bank.
Over the last five quarters, top US banks including Goldman Sachs, Citigroup and JP Morgan slowed down their fintech investments relative to the highs of 2016.
In Europe, banks were notably more active, especially Santander, which made three new portfolio investments in Q1 of 2018.
Mega-rounds boost fintech
Perhaps the most notable change in Q1 of 2018 was the 12 investments at north of $100m each – a new record.
$100m-plus investments spanned four continents and included N26, eToro, Oscar Health and C2FO.
Two new unicorns were also born: UiPath in the US, which is valued at $1.1bn; and Nubank in Brazil, which is valued at between $1bn and $2bn.
The US still boasts the largest community of fintech unicorns. As well as UiPath, the community includes: Affirm, Coinbase, Clover, Oscar, Kabbage, Gusto, Credit Karma, Avant, Robinhood, Symphony, AvidXchange, Stripe, SoFi, Zenefits and GreenSky.
Europe’s fintech community includes: TransferWise, Klarna, Adyen and Funding Circle.
Asian fintech unicorns include China’s Tongdun and India’s One97 Communications.
