KPMG, KPMG Enterprise’s Global Network for Innovative Startups and CB Insights have collaborated to create a quarterly report called The Pulse of Fintech. The inaugural report launched in November 2016 and the series will analyze global trends in venture capital (VC) investment data in the fintech sector.
“Fintech” refers to financial technology. The concept has grown rapidly during the 21st century, emerging from financial institutions and entering other sectors such as crypto-currency (e.g. Bitcoin), education, investing and retail banking. Examples of recent fintech innovations include peer-to-peer lending sites, digital wallet systems, robotic financial advisors and money management apps. The four main categories of fintech users are banks, banks’ business clients, small businesses and consumers.
“Given the significant interest in fintech globally, and its ongoing evolution in terms of market drivers, technologies and potential use-cases, KPMG and CB Insights are partnering to bring you the pulse of fintech investment globally. Each quarter, we’ll highlight key fintech deals, issues and challenges around the world, in addition to key trends and insights related to fintech in key regions, including North America, Asia and Europe,” KPMG said in a media statement.
“Despite quarterly decreases, both in terms of the number of deals and the total value of VC investment in fintech, the year-to-date view shows a positive trend. Though it is no longer expected to exceed 2015’s peak investment levels, due in large part to the lack of $1 billion+ mega-deals in Q3, the first 3 quarters of 2016 have already exceeded the annual totals for 2014 and earlier,” the statement continued.
The initial report examines the effect of fintech on a global scale, along with a closer look at fintech within key economic regions. The report seeks to identify and answer:
- How fintech continues to evolve
- If China has become a stronger fintech leader than the United States
- Why corporate investors are interested in fintech
- How fintech payment technologies are impacting our world
The report highlights several points of interest, including the fact that in Q3 2016, VC-backed fintech companies raised $2.4 billion across 178 deals, and overall fintech investment soared to $2.9 billion. Despite the high interest in fintech on a global scale, however, “investors continue to hold back on making major investments amid ongoing market uncertainty. During Q3’16, both the number of fintech deals and the total value of fintech investment dropped compared to Q2, with the dollars invested falling to less than half of the investment seen in Q3’15. The drop-off in fintech investment is in part due to a lack of $1 billion+ mega-deals, which have helped prop up the numbers in previous quarters. Q1’16 for example, included $1 billion+ funding rounds to JD Finance and Lu.com, which represented almost half of Q1’s total fintech investment. Comparatively, the top two funding rounds this quarter involved $449 million to Qufengi and $310 million to 51xinyongka,” as per the report.
A full copy of The Pulse of Fintech can be downloaded from KPMG’s website (home.kpmg.com).