U.S. Fintech Deal Activity Increases To $1.7b In Q1’16, Up 70 Percent From Last Quarter: KPMG & CB Insights Report

U.S. Fintech Deal Activity Increases To $1.7b In Q1’16

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

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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.

About KPMG International

KPMG is a global network of professional services firms providing Audit, Tax, and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s member firms have 174,000 professionals, including more than 9,000 partners in 155 countries.

About CB Insights

CB Insights, backed by RSTP and the National Science Foundation, is a software-as-a-service company that uses data science, machine learning, and predictive analytics to help our customers predict what’s next — their next investment, the next market they should attack, the next move of their competitor, their next customer, or the next company they should acquire.

Contacts:

Pete Settles
KPMG LLP
201-505-6065
732-546-4212 (c)
psettles@kpmg.com
 

Brandon Hatler
KPMG LLP
201-307-8637
201-638-5263 (c)
bhatler@kpmg.com

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