Chime, Robinhood Top FinTech VC Investments in Q4 2019

Looking back at 2019, it’s fair to say that it was a pretty good year for FinTech. From startups launching new products to major acquisitions being announced, there was plenty of news to keep up on. Of course 2019 was also a big year for investments. In fact, the latest edition of KPMG Enterprise’s Venture Pulse highlights how Chime, Robinhood, and others closed large fundraising rounds in the fourth quarter.

First, the final quarter of the year saw online bank Chime raised half a billion dollars in a Series E. That round was led by DST Global and, according to CNBC, marked the largest investment in a “challenger bank” so far. What’s even more impressive is that Chime’s $5.8 billion valuation was a nearly four-fold increase from the $1.5 billion valuation it raised money at just nine months earlier.

Also having a strong fundraising quarter was Robinhood, whose Series E added $373 million to their coffers. There are a few interesting notes about this round — the first of which is that it was also led by DST Global. Second, while the round was originally announced in July as $323 million, it was upped by $50 million before officially closing in October. Lastly the timing of that close lines up with when discount brokerage firm Charles Schwab announced that it was cutting its trade commissions to $0, leading other competitors to follow suit. In response, Robinhood re-introduced its Cash Management account plans and has since also started to roll-out fractional shares in a bid to regain their edge.

Incidentally it’s not just the United States seeing an uptick in FinTech investment. As KPMG’s report notes, firms in Canada and Brazil also had a strong quarter. Specifically, Brazil’s EBANX, VTEX, and Neon all saw sizeable investments during the quarter.

Offering insight on the report’s findings, the national co-lead partner for KPMG Venture Capital Practice in the U.S. Conor Moore said, “The continued investment in FinTech is particularly interesting. The ongoing increase in disposable income of the millennial generation is generating significant demand for the services of these companies.” Moore added, “This is driving more and more investment regardless of the multiple regulatory barriers that may need to be overcome.” Looking ahead, he theorized, “We will continue to see the FinTech model blur into the rest of the economy.  Wherever there are payments, for example, there are adjacencies to the way you make those payments or the reasons for making payments. By focusing on building an ecosystem, companies can provide stronger incentives to both customers and business clients.  These types of models are expected to lead to a new rebundling around FinTech capabilities.”

As for 2020, the year has already started off with quite a bang as it was revealed this week that Visa would be acquiring Plaid. Elsewhere we’ve also started to see VC rounds from the likes of TaxBit. All this would suggest that 2020 will be another great year for FinTech startups and beyond.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Robinhood Reveals More Details on Upcoming Retirement Account

After officially announcing plans for retirement accounts during an earnings call last month, Robinhood has now revealed more details about the upcoming feature and opened a waitlist for customers. First, Robinhood Retirement will offer both Roth and Traditional IRAs to users. With these accounts, customers will be able to invest in stocks and ETFs. Additionally, accountholders will be able to craft a custom portfolio and will be able to view...

Discover Announces 5% Bonus Categories for First Quarter of 2023

The popular Discover It card — which features 1% on all purchases as well as a slate of bonus rotating categories each quarter — has revealed what purchases will earn cardholders that 5% bonus starting January 1st. For the first quarter of 2023, Discover It cardholders can earn 5% back on grocery store, drug store, and select streaming service purchases. However, there are a few asterisks to note with this offer....

AllWork Raises $4.9 Million From FINTOP Capital 

A FinTech focused on freelancer payroll has closed a significant early-round investment. This week, AllWork announced that it had raised a $4.8 million round. The Series A was led by Nashville-based FINTOP Capital with no other participants. As a result of the transaction, FINTOP's Chris Haley and Rick Holton will join AllWork's board of directors. Previously, AllWork closed a $3.8 million seed round in 2019, bringing their to-date funding total to $8.7...