The streak of historically high levels of fintech investment continues in several industries and prominently in the alternative finance industry as news breaks that the UK’s payments start-up, TransferWise, has reportedly started negotiations for a new funding round. According to reports the company which now sees more than £1 billion transferred on its app each month is discussing a funding round that could double its existing capital and take its valuation to over £1 billion for the first time.
According to KPMG’s Q1’ 17 Pulse of Fintech report, fintech venture capital (VC) activity in Europe has hit its highest ever level and Q2 looks set to continue this trend. The report explores global trends and deal activity within the industry and says in Q1 2017, global investment in fintech hit $3.2 billion across 260 deals. It says VC investment remains high, with transaction volume also remaining healthy.
Murray Raisbeck, who presented the KPMG report finding’s said that while VC investment in Europe had hit new records, the US still ahead of VC investments for the year. According to the report, in Q1 2017, US fintech companies received investments of $1.5 billion across 124 deals. In the same period, investment in fintech companies in Europe hit $880 million across 89 deals.
Corporate investors continued to drive fintech investment, with banks, insurance companies, and other financial institutions recognizing the need to innovate and are making investments accordingly. This quarter, corporates moved beyond traditional direct VC fintech investment and looked towards building partnerships and alliances with fintech companies in order to achieve their objectives.
Within fintech, payments and lending continued to dominate deals in most jurisdictions, although artificial intelligence, the Internet of Things, big data, regtech and insurtech are quickly growing on the radar of investors.
A run-down of the most significant fintech acquisitions of 2017 so far is published in Bobsguide.