The KPMG Annual Pulse of Fintech report shows fintech investment continues to build.
$57.9B has so far been deployed in the first half of 2018, with investments across VC, PE and M&A already in excess of last year’s annual total.
Europe outstripped the US, at $14.2B and $26B respectively. The UK continues to be the bedrock of funding, bringing in a total of $16B.
And in what will come as good news for B2B plays, the report notes an ‘increasing emphasis on business-to-business fintech solutions’.
Nine out of ten of the biggest deals of the year surpassed $1B, with deal ‘line honours’ going to Ant Financial, who raised a staggering $14B.
Canada one to watch
Change is afoot in the Canadian banking scene.
According to the report, the government is pushing ahead on legislation that will somewhat mirror the UK’s PSD2. While first half deal flow was slightly less than was seen in the second half of last year, the Canucks might bring it home still. VCs and institutions are prepping themselves for a wave of innovation off the back of this change, as well as payments infrastructure updates that will improve access and hopefully, act as innovation fertiliser.
Investment levels in Canada are still relatively low however when compared to its neighbour. Only $263M has been booked so far this year. But given the nation is reportedly a hotbed of AI innovation, then it could be time more investors turned their eye to the maple syrup loving nation. With deals more likely to be hotly contested elsewhere, possibly there are some real bargains.
Home of some of the world’s biggest pension funds, it’s also worthing noting there is no shortage of institutional capital possibly almost ready to be deployed into venture. In June local pension fund la Caisse committed $25 million to new fintech venture fund Luge Capital.
US early VC matches angel/seed
Another interesting insight is the degree to which early VC is now tracking in line with angel/seed investments. The trend kicked off in late 2016, and has remained constant ever since. Getting in early seems to be the only way to avoid FOMO, with VCs increasingly happy to take early stage risk. This trend has not carried over into the Europe market, with number of deals and volume invested still lower for angel investors compared to early stage VC.
The report is a must read for anyone raising in today’s global capital markets. There are no border controls when it comes to investing, and understanding how capital is flowing and global opportunities via networks is key for any startup.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.