China is Leading Global Investment in Fintech Industry in 2018

30 Jan, 2019 02:29
source: 香港奇点财经 Singularity Financial

According to a new study by data aggregator CB Insights, fintech firms backed by venture capital raised $39.6 billion over the past year, bringing the industry’s total capitalization to an all-time high. This was also a 120-percent increase in fintech capitalization compared to 2017.

Funding was raised through 1,707 deals, and the surge in funding was due in large part to 52 mega-rounds, or investments larger than $100 million, which were worth $24.88 billion combined, the research said.

Asia Outperformed the Most in 2018

The most significant jump in the number of deals in 2018 was performed in Asia, with an increase of 38% over the previous year, and the total investment amounted to a record $22.65 bln. And the boom is being led by China, where Ant Financial — a partner payment system of internet marketplace Alibaba — raised a whopping $14 billion. The deal accounted for some 35 percent of total fintech investment last year.

Ant Financial runs China’s massive mobile payment system called Alipay, which allows banks to determine what kind of loans the consumer is qualified for — based on their history of financial transactions. Ant Financial’s total market capitalization is estimated at $150 billion.

Another similar Chinese digital payment system is called WeBank and is affiliated with Tencent — a giant entertainment, technology, and investment conglomerate. WeBank is similar to Alipay and provides digital lending software to facilitate loan underwriting for banks.

US Startup Acorns Bring its Valuation to $860 Million

In the United States, fintechs raised a record $11.89 billion through 659 investments, while the number of deals dropped in Europe, but funding reached a record $3.53 billion. Investing and savings startup Acorns has announced a Series E funding round to bring its valuation to $860 million. The $105 million round included Comcast Ventures, NBC Universal, Bain Capital Ventures, BlackRock, TPG’s Rise Fund, DST and Michael Dell’s MSD Capital. NBC Universal, now Acorns’ largest shareholder, will get a seat on the company’s board, which will be filled by CNBC Chairman Mark Hoffman.

Viola reported that its Viola FinTech initiative has raised $106.7 million for a venture-capital fund, according to a filling with the SEC. Fifteen LPs contributed capital. The firm said last year the fund could rise to as much as $150 million.

However, the recent shutdown of US government is starting to create serious problems for financial technology firms in 2019 — slowing dealmaking, impairing supervision and casting a pall over the presumed pre-eminence of the U.S. as a fintech superpower.