U.S Fintech Startup Funding Up 70 percent from Q4’15; 118 Deals to U.S. VC-Backed Fintech Companies; on Pace to Top 2015 Numbers
Venture funding in the U.S. fintech sector increased 70 percent during Q1’16 from Q4’15, to $1.7 billion after experiencing a slowdown in the last two quarters, according to Pulse of Fintech, the quarterly global report on fintech VC trends published jointly by KPMG International and CB Insights.
“Q1’16 was a strong quarter for venture capital investment in the fintech sector, characterized by 13, $50+ million rounds to VC-backed companies globally, including Betterment and StoneEagle,” said Brian Hughes, Co-Leader, KPMG Enterprise Innovative Startups Network, KPMG LLP. “However, the recent share price decline at publicly-traded fintech companies may dampen private investor enthusiasm moving into Q2.”
To read the full Pulse of Fintech report, go to http://bit.ly/1pfPcis. KPMG International and CB Insights will discuss findings from the Pulse of Fintech report, including investment trends and key players in fintech, during a live webinar on May 31 2016 at 11:00am EDT. Register at https://www.cbinsights.com/research-webinar-fintech-may2016.
The report noted that the largest fintech rounds of Q1’16 totaled more than $1 billion, with more than 50 percent of funding in North America.
Corporate participation in deals to North American VC-backed fintech companies rose for the second straight quarter, hitting a five-quarter high of 26 percent.
“It seems clear that financial institutions may see fintech as an additional sales channel. In payments, they know they can’t match the speed and frictionless experience of the platforms, so financial institutions are looking to acquire or at least rethink their own internal processes, said Fiona Grandi, Fintech leader for KPMG LLP.
The report noted that a lack of mega rounds helped push the median late-stage fintech deal size in North America to a five quarter low of $19.5 million.
Other findings from the Report:
• The U.S. is leading advances in robo advisory, providing advice and intelligence using automated software platforms in place of advisors.
• Fintech seed deal share for the U.S. fell to a five quarter low.
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