FinTech Funding Grows 169% in 2021 to Reach New Record
Anyone paying attention to the FinTech field throughout 2021 could probably guess that it was a record-breaking year. Sure enough, new figures from CB Insights confirm that to be the case.
According to the latest State Of Venture report, FinTechs raised a combined total of $131.5 billion in 2021. That marks a 169% increase over 2020’s $49 billion total. The year was capped by a $34.9 billion Q4 that ranks as the second-largest funding quarter on record for the sector, behind only Q2 of this year. Leading the quarter were deals from GoTo ($1.3 billion), Integrity Marketing Group ($1.2 billion), Devoted Health ($1.1 billion), NYDIG ($1 billion), and N26 ($900 million).
What’s more, FinTechs accounted for 21% of all venture funding last year, meaning that $1 of every five VC dollars went to a FinTech firm. Similarly, one-quarter of all startup unicorns belong to the FinTech sector. Lastly, the vertical also saw the highest proportion of early-stage deals when compared to other industries.
The $131.5 billion raised last year was also split among a record number of deals: 4,969. That’s up from the 3,491 deals cataloged in 2020 and marks a significant increase from the previous record of 3,542 set in 2019 (edging out the 3,540 deals made in 2018). Notably, 64% of those deals were early-stage ones. While that’s an increase from the 61% share last year, it’s a tad below previous years. Meanwhile, 16% of deals were mid-stage and 12% were late-stage.
CB Insights also ranked the top FinTech investors by number of deals. For Q4 2021, Tiger Global Management came out on top, with investments in 37 companies. They were followed by German VC Global Founders Capital with 23 companies. Filling out the top five were Accel (17), Andreessen Horowitz (15), and Jump Capital (15).
For as great of a year as 2021 was for FinTech, 2022 could be even better. According to eMarketer predictions, the sector could well exceed $150 billion in investment this year, with the site citing interest in blockchain and B2B tech as core drivers. Additionally, with early-stage startups making up a large percentage of 2021’s investments, these companies could potentially see larger rounds in 2022 and beyond.
Although it’s no surprise that 2021 proved to be a record year for FinTech, the figures are still staggering to see — especially the fact that the sector accounted for one-fifth of VC investment during the year. Of course, as eMarketer points out, there’s a strong chance that this year could bring on another new record. With some interesting early-round raises already announced this month, perhaps we’re on our way to blockbuster 2022.