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.