Q2 2019 Sets Record for $100 Million+ FinTech Fundings
Over the past few months, it seems as though several FinTechs have managed to close impressive funding rounds. From FinFit’s $7 million Series B last month to Affirm’s whopping $300 million Series F back in April, observers could probably guess that’s it’s been a fairly good month for these startups. Now a new study from CB Insights shows that has been the case overall, although there are some sore spots to be seen as well.
The latest report from CB Insights found that the second quarter of the year saw $8.3 billion in global FinTech funding. Notably the majority of that came from the 25 funding rounds that raised more than $100 million each, totaling around $5 billion. Most of these “mega-rounds” were Series D, Series E, or later coming from fairly established firms. Another bright spot came from challenger banks, whose 17 deals raised nearly $650 million during the quarter.
Despite the boom in mega-rounds, overall FinTech funding saw its lowest quarter in more than two years. Not only were investments down 22% on a quarterly basis but also fell 23% year over year. Moreover early-stage funding (seed, angel, and Series A) dropped by 55%. Nevertheless the second quarter brought seven new FinTech unicorns into the world: Lemonade, Bill.com, Carta, Checkout.com, Marqeta, Liquid, and Ivalua. Plus, so far in Q3, Hippo and Judo have joined the ranks of the unicorns. Meanwhile Stripe remains the top FinTech unicorns in the United States with a valuation of $22.5 billion, followed by Coinbase ($8 billion), Robinhood ($7.6 billion), SoFi ($4.8 billion), and Credit Karma ($4 billion).
At the completion of Q2, 838 funding rounds had brought in $15.1 billion. The bad news is that this puts 2019 on track to fall short of the $40.5 billion raised in 2018. However the year is only slightly behind 2017’s $18.8 billion and 2016’s $19.6 billion — this despite only two quarters of this year being accounted for so far.
Even if 2019 does end up falling short of setting a new global FinTech record, there’s no doubt that the sector is continuing to grow. With a record number of startups seeing massive fundraising rounds, new unicorns being birthed, and even companies like Fox buying into FinTech firms, it’s clear that financial technologies are as relevant as ever. Plus, with Q3 already off to a good start, don’t be surprised is 2019 still has some records to break.