August 14, 2019 /04:15PM / By CB Insights / Header Image Credit: CB Insights
Summary of Findings
Q2’19 fintech funding topped $8.3B, boosted by a record quarter of $100M+ mega-rounds
Funding in Q2’19 got a boost from 25 $100M+ rounds worth approximately $5B in funding. Mega-rounds were largely to established, late-stage (Series D and Series E+) fintech startups.
Despite funding surge, Q2’19 VC-backed deal activity fell to a 10-quarter low
Fintech deals in Q2’19 dropped 22% on a quarterly basis and declined 23% compared to the same quarter last year. Early-stage (seed/angel and Series A) deal share fell to 55%, a five-quarter low that contributed to the overall dip in deals.
Challenger banks continued to pick up multimillion-dollar rounds to fuel international expansion and customer acquisition
Q2’19 saw challenger banks raise $649M across 17 deals. Funding through the first month of Q3’19 is on track to see another $1B+ deployed to challenger banks. Yearto-date funding in 2019 has already surpassed 2018’s record of $2.3B.
There are 48 VC-backed fintech unicorns worth a combined $187B
Q2’19 saw seven new fintech unicorn births (Marqeta, Bill.com, Carta, Lemonade, Checkout.com, Ivalua, and Liquid) and two in the first month of Q3’19 (Hippo and Judo). Valuations continued to grow in Q2’19 as many companies preferred to raise private financing over going public.
Every continent saw deals dip in Q2’19
North America, Asia, and Africa each saw 5-quarter lows for fintech deals. North America saw deals drop 21% on a quarterly basis. However, funding to North American fintech surged on the back of 15 mega-rounds in Q2’19 that also minted 3 of the 4 new US-based fintech unicorns.
India tops China in fintech deal activity for the first time ever
India saw 23 deals to VC-backed fintech companies, topping China by 8 deals. Fintech funding in China hit $375M, narrowly beating India, which saw $350M invested.
Latin America becomes one of the fastest-growing regions for fintech funding
LatAm topped both China and India for fintech funding in Q2’19, with 23 deals worth $481M. Q3’19 has already seen a $400M mega-round to Brazil-based digital challenger bank NuBank.
Asia deals and funding on track to fall below 2018 total
Asia saw 82 deals worth $1.1B in Q2’19 — both close to historical lows.
Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, private equity firms, or any debt, secondary, or line of credit transactions. All data is sourced from CB Insights.