Global investment in fintechs dipped slightly in 2019 as strong growth in the US, India and Brazil was offset in China, where the mega-deals dried up, according to a report from Accenture and CB Insights.
The global value of fintech deals last year was $53.3 billion, down 3.7% from $55.3 billion in 2018, when totals were boosted by a record $14 billion for Ant Financial as well as several over billion dollar-plus Chinese deals.
Most markets saw strong growth, with the value of deals in the US jumping 54% to $26.1 billion and the number of transaction also up as payment, lending and insurance startups all raked in the cash.
Brazil saw the value of its deals nearly triple to $1.6 billion, while Germany and Sweden also recorded record results. In the UK, Brexit uncertainty seems to have had little effect, with investment hitting $6.3 billion, almost the same total as for the previous two years combined.
Asia Pacific and Europe saw the highest growth in the number of deals, with Singapore and Sweden standing out, recording gains of 52% and 79% respectively.
2019 saw challenger banks emerge as a major attraction for investors, with global funding more than tripling to $5.2 billion, led by the $726 million raised by Italian digital bank and card processor Nexi, the $683 million from South Korea’s Naver Financial, and the $700 million that Chime raised in two separate transactions in the US. In Europe, N26, Monzo and Starling all pulled in big investments, while Brazil's Nubank and Banco Intermedium also made huge raises.
Elsewhere, investments into payments startups and lending startups took the bulk of global fintech fundraising, accounting for 28% and 25% of the total respectively, while insurtechs raked in 13%.
Julian Skan, senior MD, Accenture financial services practice, says: “Despite strong demand for fintech globally, it’s likely that, as startups become more mature, investments will flow to fast-growing economies, where there’s still a huge, unaddressed consumer and corporate market thirsty for innovations.
“For now, there’s still a lot of growth, particularly for challenger banks that are expanding in their home markets and overseas, as well as for payments providers that are embedding solutions seamlessly into our day-to-day activities.”