By Nse Anthony-Uko
Funding for financial technology companies around the world stabilised in 2017, rising to $31 billion although it is still below the level it reached in 2015.
International accounting firm, KPMG in a report said the 2017 investment figure is in line with “the high level of investment seen in 2016.”
However, 2016 saw a big drop off in investment on the previous year, particularly in North America and Europe. Last year February KPMG had predicted the market would bounce back, citing the “game changer” that is PSD2 in Europe and the rise of insurtech and new technologies such as blockchain, AI and the Internet of Things.
Although the overall numbers did not meet expectations, insuretech and blockchain did see record levels of venture capital investment and deal volume. Over the last 12 months, insurtech raised $2.1 billion across 247 deals and blockchain generated $512 million of investment from 92 deals.
Geographically, the United States of America saw almost half of the 2017 global total, with $15.2 billion raised for the year. M&A accounted for the majority of this funding, with US$8.7 billion in deals in 2017. Investment in Europe reached $7.44 billion, while Asia saw a big drop off to $3.85 billion, down from more than $10 billion in 2016.
The number of PE deals reached a record high of 139 in 2017, providing $17 billion in investment. Corporate participation in VC deals also soared, to 19 per cent, although the amount actually invested was down significantly, from $9.6 billion in 2016 to just $5.4 billion in 2017.
Murray Raisbeck, global co-lead, KPMG Fintech, says: “So much is happening – from the increasing focus on insurtech and blockchain, to the ramifications of maturing companies, such as challenger banks, looking to expand and grow. With regulations changing, particularly in Europe – 2018 will likely be an exciting year.”
