FinTech News
Global FinTech Funding Reaches High in 2018
It seems that every year over the past several has been dubbed “The Year of FinTech” by someone — and often times for good reason. However, if you were considering bestowing such a title to 2018, you’d have one big stat on your side. As Business Insider reports it proved to be a banner year for FinTech funding worldwide, likely besting the past three.
Although figures for the full year aren’t yet available, BI notes that the first half of 2018 saw $57.9 billion in funding for FinTech ventures. Considering that number comes close to the $62.5 billion raised in a record-breaking 2015, one can assume the final total will top that. This increase comes after two down years, with FinTechs raising a total of $42.5 billion and $38.1 billion in 2016 and 2017 respectively.
Adding to this blockbuster year were megadeals earned by firms around the globe. Here at home the popular cryptocurrency exchange Coinbase, car insurance disruptor Root, and community pay advance app Earnin all had funding rounds top $100 million last year. Those domestic ventures were joined by U.K.-based Revolut and Hong Kong’s Oriente in the $100 million club.
As big as 2018 was for FinTech, BI predicts an even better year ahead. Explaining their logic, they note that there are now several different funding avenues startups can pursue “from receiving backing from VCs to wooing incumbents, or even pursuing crowdfunding.” Because of these options they predict that some firms may even fill out larger funding rounds — and raising the global total in the process.
Beyond funding rounds, there were several other notable developments in the world of FinTech last year. Among them the Office of the Comptroller of the Currency finally opened up applications for Special Purpose National Banks — although that decision still faces some legal challenges. Other big headlines saw traditional institutions continuing to partner with, purchase, or otherwise invest in FinTechs. For example in 2018 BlackRock announced a partnership with the microinvesting app Acorns, Goldman Sachs purchased the personal finance app Clarity Money, and Chase announced it was building a new FinTech campus in Palo Alto.
Overall it could be said that 2018 was a more “low key” year for FinTech but that might actually be a good thing. As the sector matures not only are more consumers feeling comfortable with such technologies but investors are also warming to them. Of course regulators still aren’t entirely sold on all aspects of FinTech as evidenced by the lawsuits against the OCC but hopefully that will reach a resolution this year. All things considered, expect 2019 to be another great year for FinTech.
