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Global VC-backed fintech funding declines in Q3, but Asia investment reaches new high

After quarterly fintech investment to venture capital-backed companies peaked as high as USD5 billion-plus in 2015, investors are continuing to take a much more cautious approach to fintech investments this year.

That’s according to Pulse of Fintech, a quarterly report on global fintech VC trends by KPMG International and CB Insights, which finds that funding for the sector fell 17 per cent to USD2.4 billion in Q3 2016.
 
Overall global investment in fintech companies across both venture-backed and non-venture-backed companies totalled USD2.9 billion in Q3 2016, while the quarter saw deal activity fall 12 per cent to 178 deals.
 
"This quarter, Asia outpaced North America in terms of fintech funding – a major shift from historical norms," says Warren Mead, global co-leader of fintech, KPMG International. "The question is whether Asia will continue to set the pace headed into 2017. With the diversity of investments and widespread support for the growth of fintech hubs in the region, it's a very distinct possibility."
 
Anand Sanwal, CEO of CB Insights, adds: "While we continue to see significant investment into fintech companies globally, the euphoria for mega-deals that we saw into the latter half of 2015 has waned. Total investments to key areas like marketplace lending and blockchain technology have both seen declines heading into the tail-end of 2016."

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