According to research firm CD Insights, fintechs around the world raised $33.9 billion in total in 2019. The annual report described this capital injection over 1,900 deals.
There has been a decrease from 2018, mostly because venture capital firms have been looking to invest more in late stage firms rather than up front before these businesses prove themselves in the market. In 2018 the total investments in fintech companies reached $40.8 billion.
As previously mentioned, early stage businesses attracted less investment than before. Series A fund raises dropped to the lowest level in five years in 2019. Conversely, Series B funding rocketed to a five-year high.
Emerging markets performed extremely well and attracted most of the fintech interest from around the world. South America, Africa and Southeast Asia all topped their annual highs last year.
Interestingly, a lot of money is starting to flow east. Asia outpaced Europe in the second half of last year, both from a capital investment point of view and number of deals. In Q3, European startups raised $1.6 billion through 95 deals, compared to $1.8 billion amassed by Asian startups across 157 deals. In Q4, a similar story was at play – European startups participated in 100 rounds to raise $1.2 billion, compared to $2.14 billion raised by Asian startups across 125 deals.
2019 also saw 24 new so-called fintech unicorns come to the fore, i.e. startups that reach the $1 billion valuation.
The insurance sector in fintech had a landmark year in 2019. Fintech companies that focus on insurance services raised $6.2 billion in 2019, up from $3.2 billion in 2018.
Nearly half of all the funding to fintech startups was down to 83 huge rounds, of size $100 million or above. These massive investments was up around the world, except in Europe.
With 2019 being a difficult year to garner Series A funding, it will be interesting to see what 2020 holds for early stage startups.