Global investment in fintech rose by 18 per cent during 2017

Written by David Adams

Global investment in fintechs rose 18 per cent in 2017 to $27.4 billion, according to Accenture and CB Insights. Deal values increased by 31 per cent in the US, to $11.3 billion, almost quadrupled in the UK to reach $3.4 billion; and increased by a factor of five in India to reach $2.4 billion. The overall number of fintech venture capital deals increased from 1,805 in 2016 to 2,694 in 2017. Fintechs focusing on lending and payments accounted for about 30 per cent of total funding in 2017.

The only backward step was taken in China, where investors put about $10 billion into fintech investments during 2016, but in 2017 this fell back by 72 per cent to $2.8 billion. Average fintech investment deal size fell in China from $186 million to $19 million.

$97.7 billion has now been invested in fintechs since 2010, with 54 per cent of all investments having been in US start-ups. The most dramatic growth has taken place in the past four years, with the value and number of global fintech investment deals increasing from $4.8 billion and 812 deals in 2013, to $13.3 billion and 949 deals in 2014; then $21.2 billion and 1,194 in 2015.

Accenture believes a number of factors are helping to drive the market, including the contribution of investment flows from China, Russia, the Middle East and some emerging economies; the success of some more mature B2B fintech concepts; and the rise of insuretech, which accounted for about 12 per cent of global fintech funding.

“This volume of investment reflects the soaring demand within financial services for new digital innovations, as these technologies prove their value and applicability in the market,” said Richard Lumb, group chief executive, financial services, at Accenture. “That will continue to position fintechs for a vital role in helping to reshape the financial services landscape. For markets like the UK, where slower economic growth and industry uncertainties due to Brexit have been an issue, it is an encouraging sign.”