Sequoia Found to Be Most Active FinTech VC of the Past Year
When it comes to investments in FinTech, a few investment firms tend to come up again and again. But which venture capital group has participated in the most funding rounds as of late?
According to CB Insights‘ latest State of FinTech report, it’s Sequoia Capital that’s been the most active FinTech VC of the past year (Q2 2019 to Q2 2020). However, there is an asterisk to that as the company combines activity from its funds in the United States, China, and India. Nevertheless, Sequoia has certainly been busy, leading funding rounds for the likes of Robinhood while also counting Klarna, Capital Float, and others in their portfolio. Following Sequoia on the list was 500 Startups, with investments in Chipper, Trusting Social, CreditStacks, and more. Another familiar name, Ribbit Captial, came in third. Among their investments are Upgrade, Revolut, and many others. Accel and GFC rounded out the top five.
Given their status in these rankings, it should really come as no surprise that Sequoia participated in or led the top three largest FinTech rounds last quarter. These include payments processing giant Stripe’s $600 million Series G in April, investment platform Robinhood’s $600 million Series F (originally announced as $280 million in May before being upped), and Brazillian challenger bank Nubank’s $300 million round in June. Coming in fourth on that list — and marking the first non-Sequoia entry — was the $241 million that Varo Money raised in June. Incidentally, just last week, Varo made big news by announcing that it had obtained a national bank charter, forming Varo Bank, N.A.
Looking at Q2 2020 on the whole, the global FinTech industry saw a 17% quarter-to-quarter increase in funding. In total, deals amounted to $9.3 billion in investments over the three months. On the other hand, April brought a new low in terms of the number of deals with just 127. This did rebound come June when 141 deals took place, but the quarter was still down from pre-pandemic times. Megadeals continued to rise, though, hitting 28 in Q2 to mark a new quarterly record.
The second quarter of the year also brought the birth of a new FinTech unicorn: Upgrade. Meanwhile, another unicorn — insurtech brand Lemonade ($LMND) — went public just after the end of the quarter. Subtracting Lemonade from CB Insights’ Q2 figures, there are now 65 FinTech unicorns in the world worth a total of $246 billion.
Overall, while 2020’s second quarter may have been a bit of a mixed bag for FinTech investing, there’s clearly still a strong interest in the sector. From VCs like Sequoia, 500 Startups, and Ribbit continuing to make deals to the slate of IPOs now on the docket, financial technology firms have managed to not only hold their own but grow during what’s been an interesting year (to say the least). With more exciting developments already occurring in this new quarter and on the horizon, we can expect more good things from the FinTech field.