01 September 2015

Payments start-ups raise $1.2 billion across 193 deals in 2013

10 January 2014  |  9931 views  |  0 cash

A 16% decline in M&A and IPO activity in the payment space in 2013 was more than compensated for by a boom in early-stage investing, according to data from CB Insights, as a mix of VCs and corporate venture firms all continued to jockey for a piece of this massive industry.

The analyst group says that in 2013, payments start-ups raised $1.2 billion in funding across 193 deals. On a year-over-year basis, venture capital funding and deals to payments tech companies ticked up five percent and six percent, respectively, from 2012 levels.

Deal growth was concentrated at the early stage, with seed funding accounting for 42% of all deals in the payments space over the past two years. Of the payments start-ups that first received a seed round between Q1 2010 and Q3 2012, 35% went on to eventually receive Series A funding.

The data shows a diversity of active investors in the payments space, spanning pure-play VCs to the corporate venture units of financial services firms and cash-rich tech companies. The most active investors over the past two years have been Accel Partners, which counts Braintree, Gumroad and GoCardless in its portfolio and Andreessen Horowitz which has invested in firms including Dwolla, Boku and Jumio.

Interestingly, the most active corporate investor in the payments space was not in financial services but Intel Capital, which has done a handful of deals since the start of 2012.

On a year-over-year basis, the payments space has seen a 16% drop in M&A and IPO activity, says CB Insights. While 2013 saw a number of small-ball payments acquisitions for both technology and talent, there were a few notable exits including PayPal's $800M acquisition of Braintree and FIS's buyout of Ignition Partners-backed mFoundry.

Moving forward, says the firm, the anticipated 2014 IPO of Square is likely to provide another shot in the arm for the industry.

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

14 November, 2013
07 November, 2013
14 August, 2013
05 June, 2013
13 November, 2012


Who is commenting?

Top topics

Most viewed Most shared
SunGard system glitch causes havoc for BNY...
7029 views comments | 14 tweets | 12 linkedin
Third of Brits expect day-to-day mobile pa...
6510 views comments | 36 tweets | 13 linkedin
Kenya's NIC Bank links to Twitter and What...
6195 views comments | 27 tweets | 17 linkedin
Payments UK sets out vision for 'world cla...
5901 views comments | 17 tweets | 10 linkedin
HSBC glitch leaves thousands of customers...
5697 views comments | 13 tweets | 6 linkedin

Featured job

Basic £100K+ OTE £200K+
London

Find your next job