Innovate Finance, an association for the global Fintech industry founded in 2014, has revealed that global venture capital in Fintech for the first half of 2016 is up significantly. According to their numbers, during the first 6 months of the year, global Fintech investment increased 148% over the same period year prior. Innovate Finance stated that $13.2 billion went into Fintech and, for the first time, China outpaced US VC Fintech investment. The China numbers were boosted by the $4.5 billion Alipay funding round.
Innovate Finance also showed that UK Fintech investment declined significantly. UK venture capital Fintech investment dropped by 33% year over year tallying just $386 million. Innovate Finance highlighted notable UK Fintech funding rounds during 2016 including:
- Transferwise $26 million
- Lendinvest $25 million
- Property Partner $22.6 million
- Azimo $15 million
- GoCardless $13 million
- Syndicate Room $4.5 million
- Lending Works $4.3 million
- TransferGo $3.4 million
CVC investment in FinTech, and Institutional investment in FinTech accelerators, partnerships, labs and consortia remains very firm with estimates from top tier global financial institutions in the range of $1–5M for the period.
“Brexit clauses” were said to have delayed some funding rounds for Fintech firms in the UK. Anecdotal evidence from US and UK based VC firms indicated that “Brexit has not affected material interest in investing in innovative UK FinTechs, and in some cases, USD and EUR denominated funds have seen value opportunities.”
“Since the Brexit vote, there are few visible signs that FinTech investment has slowed with Innfin member deals including: Crowdcube $9.1M, Meniga $8.2m, TransferGo $3.3M, Moneybox $1.8M, Huddlestock $1.9M, CreditKudos $.9M, RiskSave $.2M, and Onfido (undisclosed),” said Lawrence Wintermeyer, CEO of Innovate Finance. “Member Santander Innoventures, the corporate venture capital arm of Santander, increased the size of its fund by $100 million.”
Innovate Finance said that over 25 start-ups in the Innovate Finance membership are currently raising capital. The association also declared that, at this early stage, the data indicates that many UK FinTechs appear “largely unaffected” by the Brexit vote. The report also cautioned that longer term effects of a potential single market exit and loss of financial services passporting status including access to talent remains to be seen. Approximately 30% of Innovate Finance founders and members are non UK firms.
Innovate Finance said a full analysis up to Q3 2016 will be available in October.