According to the report, the U.S. continued to dominate venture capital deals in the FinTech market; accounting for $1.3bn out of the total $2.5bn raised throughout the quarter.
Advertisement
“Despite VC backed funding to fintech decreasing in Q2, overall fintech funding remains on track to surpass 2015 levels”.
Amid a tougher climate for marketplace lenders and a drop in mega-round activity, investment in VC-backed fintech companies fell 24 percent in the U.S and almost 50 percent globally during Q2 ’16, according to the Pulse of Fintech, the quarterly global report on fintech VC trends published jointly by KPMG International and CB Insights.
Fintech seed deal share fell to a 5-quarter low in Q2’16 at 29% from 34% in Q1’16.
The report particularly looks into the fintech landscape in North America, Europe and Asia.
Geographically, North America got the lion’s share of all investment in the fintech space ($1.3 billion), accounting for more than half the total global funding.
“InsurTech and blockchain were among the big winners during the quarter, with a number of significant funding rounds coming in these two sub-sectors, including rounds by Clover Health Insurance, a company focused on offering data-driven health insurance options ($350 million) and Circle Internet, a company that allows users to send payments for free ($60 million)”. “Despite the funding drop, previously under-invested areas of fintech such as an insurance area are gaining strong momentum among venture investors across geographies”.
KPMG said that given the surge in investment in the fintech sector previous year, it is most probably seeing some sort of plateauing. While the number of deals dropped slightly, investment rose from $303 million to $369 million quarter-over-quarter.
According to the new report, overall global investment in fintech companies across both venture-backed and non-venture-backed companies stood at $9.4 billion in April-June 2016, buoyed by Ant Financial’s $4.5-billion financing.
Asian Fintech hit $772 million dominated by China.
KPMG and CB Insights say the findings “suggests Germany as a whole is well positioned to attract fintech investors that may be hesitant to invest in the United Kingdom post-Brexit”.
“This highlights that the United Kingdom intends to continue to foster its strong fintech ecosystem”.
Advertisement
This “cooling-off” period, the report adds, is expected to last throughout the rest of the year as investors continue to take a “wait and see” approach in hope of seeing greater market stability in the next few months.
