BOSTON–The level of investment flowing into fintechs is increasing.
According to research by GlobalData, a deeper look into the venture capital (VC) investments in fintech “suggests that the gradual increase witnessed since 2014 has now shown a spurt in 2017.”
In the first three quarters of 2017, 455 investment cases of $5 million or more have been announced, marking a surge of 23% over the average annual 369 investments for the preceding three years,” GlobalData reported. “On the other hand, the sub-$5 million segment witnessed a drop of 22% in the number of investments this year over the corresponding period.”
In analyzing VC activity in 2017, GlobalData said it has observed an “interesting trend” with regard to the split between the newly funded companies and those receiving multiple rounds. Funding for the companies receiving multiple rounds has dropped to 4% in 2017 as against 13% earlier, indicating the rising potential for new investments in this domain, the company said.
“It is evident from the rise in investments that a lot of new ideas are getting funded in fintech space, thereby offering good scope of innovation and disruption,” said Ameet Phadnis, research and analysis director for financial services at GlobalData.
Global data added that although VC investments in the fintech space in Q3 2017 have dropped by 7% in value terms over Q3 2016, the average deal size has surged by 26% to $19 million from $15 million, clearly reflecting rising investor confidence.