Venture capital is flooding fintech. CNBC reports that fintech companies raised a record $39.57 billion from investors globally in 2018, an increase of 120 percent from the prior year, according to CB Insights research.
The leading data provider’s research found that this funding was raised across 1,707 deals compared to 1,480 in 2017.
52 mega-rounds, or rounds that raised over $100 million, accounted for a bulk of the uptick in venture capital raised: $24.88 billion to be precise, according to CB Insights.
Ant Financial, the payment arm of Chinese e-commerce juggernaut Alibaba Group, can be attributed for 35 percent of total fintech funding alone last year, after raking in a $14 billion investment.
The last quarter of 2018 saw the emergence of five fintech unicorns. Companies to reach over $1 billion in funding included Brex, Monzo and Plaid.
“Venture capital investors have been pouring billions of dollars into fintech companies, in the hopes that they can gain market share from incumbent financial institutions by offering easier to use and cheaper digital financial services.”
“Venture capital investors have been pouring billions of dollars into fintech companies, in the hopes that they can gain market share from incumbent financial institutions by offering easier to use and cheaper digital financial services,” says CNBC.
Don’t expect to see too many IPOs from these companies in 2019, however. CB Insights researchers predict that “IPO activity is likely to remain lackluster in 2019.”
Other insights included Asia showing the most deal growth at 38% YOY and setting a new funding record, raising $22.65 billion across 516 deals. The U.S. maintained the top spot for deals, with 659 investments worth $11.89B funding.
Meanwhile, Europe dropped slightly in deals, ending the year with 367. Funding in the region, however, topped $3.53 billion, an annual record.
Finally, other global markets are gaining momentum in fintech, accounting for 39% of deals in 2018.