Global investment in Fintech soared to a four quarter high of $8.4B across 293 deals at the end of the second quarter of 2017, according to the Pulse of Fintech Report published by KPMG.
The report continues that a cored trend over the prior year has been the drive for international expansion by tech giants such as Alibaba. The Chinese behemoth has driven investment into India, the United States and South East Asia via Paytm, MoneyGram and Lazada respectively. The payments space has been and continues to be a highly competitive space for fintech investment.
Business to Business move
Whilst financial disruption was originally driven by customer experience through customer-facing initiatives, there is a move to focus more on the back end efficiencies which will drive B2B investment. KPMG points out that the banks are realising they need to reduce the costs and inefficiencies in their back end systems to compete with disruptors and boutique providers. In light of this“Blockchain, AI, cloud computing and robotics are expected to remain hot areas of investment throughout the remainder of 2017(Pulse of Fintech Q2 2017, 1 August, 2017).
Corporate steps up investment
When turning to where the majority of the growth in financing fintech is coming from, corporate-affiliated investors are ramping up their contribution to worldwide investment. Corporations are looking for M&A opportunities where there are potentially viable technologies, as well as a lucrative return of course.
Late stage, post-money valuation drops
The timing of investment in Fintech companies has changed course somewhat with the early stage investment value rising steadily since 2015 whilst late stage investment has declined rapidly in the same period. 2015 late stage investment was valued at an average of $20m down to $12m in Q2 2017. The KPMG report notes “the global median late-stage, post-money valuation fell during Q2’17, likely as a result of the scarcity of such late-stage deals in the fintech market globally, in addition to a normalizing of investor sentiment with respect to VC investment.”(KPMG,2017).
Record likely for Regtech
Regulation Technology or Regtech is on track for a record year. At the end of Q2 the mid-year total investment was $591M across 60 deals. The fintech sector has already surpassed the 2015 full year investment totals and is likely to overtake the 2016 full year investment total. It is important to note that investors see the greatest potential in not purely regulation technology providers, but rather businesses that have significant Regtech application potential.
Ecommerce Money Africa triples fintech investment
The 2018 Ecommerce Money Africa Conference has trippled their investment into fintech through a dedicated track covering a wide range of topics across the fintech landscape. A special fintech advisory panel representing CEO’s and Founders of the most influential fintech companies on the continent is being assembled to guide the event.
Current members of the panel include Ran Neu-Ner (CEO, The Creative Counsel), Clive Butkow (CEO, Kalon Venture Partners), Manual Koser (Founder, Silvertree Capital), Scott Picken (CEO, Wealth Migrate), Shruti Chandrasekhar (SIO, International Finance Corporation) and Thomas Pays (CEO, iPay).
The event being held at the brand new East Wing CTICC on the 14th and 15th of March in Cape Town is the largest and premier ecommerce and fintech event on the continent.
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