Over half of fintech funding globally in Q2 went to Asia, thanks to Softbank-Paytm deal

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Driven by a mega $1.4 billion-investment by Softbank, Asia surpassed the US to account for over half of the funding raised by venture-backed financial technology (fintech) firms in the second quarter of 2017.

Overall Asian fintech funding in Q2 stood at $2.7 billion, helped by Softbank’s $1.4 billion investment in One97, the parent of India-based payments giant Paytm, according to a CB Insights report. Paytm’s funding accounted for 40 per cent of Asia fintech funding in the first six months of 2017.

According to CB Insights, Asian deal volumes and funding in the fintech space are on pace to surpass 2016’s record at the current run rate. Compared to Q2 2016, Asia fintech funding rose 88 per cent while deals increased 22 per cent.

After a dip in Q1, VC-backed fintech funding in North America rose 54 per cent in Q2 this year. The region also recorded the most deals of all regions in the quarter.

Globally, VC-backed fintech ventures raised $5.2 billion across 251 deals in Q2 2017, with VC investments in fintech on pace to rise 19 per cent this year compared to 2016 at the current run rate.

According to CB Insights, if the rest of the year sustains H1 2017’s deal pace, global fintech deal activity could surpass 2016’s all-time high.

UNICORNS & INVESTORS

Globally, there are 26 fintech unicorns with an aggregate value of $83.8 billion as at Q2 2017, with five new additions in the form of Clover, Symphony, Robinhood, AvidXchange, and Tuandaiwang. Asia is host to seven of these fintech unicorns, with the US host to 15 and Europe having four.

North America saw 12 $50-million+ fintech deals worth a combined $1.29 billion being inked in Q2 2017, leading to four new unicorns. On the other hand, Asia saw five VC-backed fintech companies notch $100 million+ deals in Q2.

With a presence in over 60 countries, Silicon Valley-based 500 Startups was the most active investor in fintech globally over the last five quarters. It was also the most active investor in the Asian region followed by SBI Investment, Matrix Partners China, Sequoia Capital India and Zhen Fund.

US-based investors New Enterprise Associates, Ribbit Capital, and Index Ventures also figured among the most active VCs in global fintech over the last five quarters.

ASIA CHAPTER

In Asia, early-stage — seed and Series A — deal share in fintech grew to a five-quarter high in Q2, accounting for over two-thirds of combined deal share. Seed-stage deals increased their share from 30 per cent in Q1 2017 to 39 per cent in Q2 2017.

Asian VC-backed early-stage fintech companies raised $171 million across 45 deals in Q2 after witnessing falling deal volumes for three consecutive quarters. Deals rose 150 per cent, while funding rose 176 per cent on a quarterly basis in the reported quarter.

The April-June quarter also witnessed a massive 233 per cent spike on a quarterly basis in early-stage median deal size to $5 million, after a temporary dip in Q1 this year.

The spike was driven by several $10-million+ early- stage deals, including investments in Zhongan Financial Holding, IceKredit, and Jucaicat. Chinese firms dominated top ten deals by taking seven spots, while Indian fintech firms occupied the other three positions.

Within Asia, deal activity to VC-backed fintech companies in China hit a new five-quarter high with 27 investments, a rise of 93 per cent on a quarterly basis.

In India, too, both investment and deal activity to VC-backed fintech companies surged to a five-quarter high. However, without SoftBank’s investment in Paytm, Indian VC-backed fintech funding would stand at $98 million over the three-month period.

Also Read:

Global fintech funding drops in 2016, Asia maintains growth

Global VC-backed fintech funding drops in Q3’16 to $2.4b, Asia bucks trend

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.