Our first quarter State Of Fintech report features data-driven insights from our emerging tech insights platform. We take a look at global fintech investment trends in key financial verticals, partnership activity, public company earnings call transcripts, and overall deal funding across the world.
The Covid-19 pandemic has rattled both public and private markets globally.
VC-backed fintech startups are no exception. Across the board, fintech funding activity stalled in Q1’20 as the coronavirus outbreaks forced investors to pull back investments.
- In Q1’20, VC-backed fintech funding dropped to $6.1B across 404 deals. The Covid-19 outbreak had a significant impact on fintech financing resulting in the worst Q1 since 2016 for fintech deals and the worst Q1 for funding since 2017.
- With forecasts of a recession, investors pulled back on early-stage bets to focus on fortifying portfolios. Q1’20 early-stage (seed & Series A) fintech startups saw 228 deals, a 13-quarter low, and $1.1B in funding, a 9-quarter low.
- Fintech funding in Asia, North America, Australia, South America, and Africa dropped quarter-over-quarter. In Q1’20, Asia saw a 69% drop in funding (to $883M) and a 23% drop in deals quarter-over-quarter. Europe was the only major region to see an increase in funding, driven by 4 mega-rounds ($100M+) including Revolut’s $500M Series D and Qonto’s $115M Series C.
- Investors start to see some liquidity amid a fintech M&A spree in 2020. In addition to the Plaid and Credit Karma acquisitions, fintech unicorn SoFi acquired Galileo for $1.2B and exited unicorn LendingClub acquired Radius Bank for $185M, pending close.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity