The bitcoin/blockchain and insurance tech categories reached highs in Q1'16. The payments space saw relatively consistent funding activity.
In 2016, global VC-backed fintech startups raised $12.7B across 836 deals. Both deal number and dollars invested in fintech startups worldwide were down from 2015’s banner year, according to our 2016 fintech report. To dig further into the data, we zeroed in on activity in insurance tech, blockchain/bitcoin, and payments to see how specific verticals fared over the last year.
The year started off with a strong first quarter boasting 33 deals and $768M going into insurance tech startups. Q2 saw a drop in dollars and deals to $387M and 20 investments, followed by a mixed Q3 in which less money went into more deals. Q4’s deal activity jumped back up to 33 deals, but funding only ticked up slightly from Q3.
Blockchain and Bitcoin
Blockchain and bitcoin startups are poised to disrupt more than just finance, and investors didn’t neglect this burgeoning technology. As with insurance tech, Q1 saw a peak in deals and dollars, with $153M invested across 22 deals, buoyed by financings to Blockstream and Digital Asset Holdings. Dollars and deals dropped in Q2 and Q3 and dollars continued to fall into Q4, bottoming out at $69M. Deal activity bumped up again, however, to 17 deals.
In contrast to insurance tech and blockchain/bitcoin investments, payments tech companies (including online and mobile payments, and points-of-sale systems) started 2016 at their nadir, with only $303M invested across 31 deals. Deal volume jumped to 40 in Q2 and stayed there for Q3, only dropping slightly to 39 in Q4. Funding dollars, meanwhile, spiked in Q2 to $454M, stayed above $400M in Q3, and finished 2016 strong with $477M invested.
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