Press release: KPMG Pulse of Fintech Q3 2017 | KPMG | IE

Global fintech investment remains robust on back of strong VC funding

Global fintech investment remains robust

KPMG Pulse of Fintech Q3 2017

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Partner, Head of Technology & Media, Fintech Lead

KPMG in Ireland

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  • Total global fintech funding remains strong - US$8.2 billion invested in Q3’17 compared to US$6.3 billion in Q3’16
  • European fintech deals account for US$1.66 billion of investment across 73 deals
  • Corporate VC investment in Europe skyrockets with a record US$647 million already invested with CVC participation YTD

Dublin, 9 November, 2017 – KPMG has published its latest Pulse of Fintech report, a quarterly global analysis of investment in fintech. Key findings show that total global fintech funding continues to remain strong, with US$8.2 billion invested in Q3’17, well above the U$6.3 billion raised in the same period last year.

The US led global fintech investment in Q3’17, with US$5 billion deployed across 142 deals. Europe and Asia fell behind the US, with Europe fintech deals accounting for US$1.66 billion of investment across 73 deals, and Asia accounting for US$1.21 billion across 41 deals. 

Europe makes strong VC gains in the fintech space in Q3’17

While total fintech investment in Europe dipped in Q3’17 to US$1.66 billion, from US$2 billion in Q2, VC funding was particularly strong in Q3 at over US$700 million. Median late stage fintech deal size for the quarter sat at US$17.3 million, well above 2016’s US$10.2 million. Corporate VC investment in Europe has also skyrocketed compared to 2016, with a record setting US$647 million already invested with CVC participation YTD. Corporate participation in fintech VC deals is also up dramatically – from 13 percent in 2016 to 20 percent in 2017 YTD.

Speaking on the findings at the Web Summit MoneyConf Stage, Lisbon, Anna Scally, Partner, Head of Technology and Media and FinTech Lead, KPMG in Ireland, said: “The level of corporate participation in fintech VC investment deals in Europe can largely be attributed to a growing recognition by traditional financial institutions that digital transformation is critical. Build or buy is always an important consideration. Many of these financial institutions have started to heavily invest in Fintech companies as a strategy to give them the direct access to the new technologies they need to compete."

Globally, despite healthy investment activity, the volume of VC fintech deals dropped dramatically in Q3’17, particularly at the earlier deal stage. The number of angel and seed stage fintech deals plummeted to 67 for the quarter, a low not seen since Q1’13. This reflects the trend of investors focusing on larger deals and higher quality companies with proven business models.

Key Q3’17 global highlights

  • Global fintech investment was US$8.2 billion in Q3’17, down from US$9.3 billion in Q2’17.
  • VC funding increased to US$3.3 billion invested across 211 deals, up from US$3.01 billion in Q2.
  • The median deal size for angel/seed stage deals at the end of Q3’17 stood at US$1.4 million – up from US$1 million in 2016, while the median deal size for early stage rounds was also up to US$5.5 million from US$5.1 million in 2016. The median deal size of late stage deals was even year over year at US$16 million.
  • While overall corporate VC funding has declined so far this year, the participation rate remains high. Corporates have participated in 18 percent of all fintech VC deals globally (YTD)
  • Fintech venture-backed exit activity skyrocketed in Q3’17, almost tripling quarter over quarter from US$270 million to US$940 million. This reflects the second-best quarter on record for fintech exits.
  • Insurtech VC deals and investment are on track to reach record highs by end of the year. By the end of Q3’17, more than US$1.5 billion had been invested by VCs in insurtech across 179 deals, compared to US$1.8 billion across 203 deals in all of 2016.

ENDS

 

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