Financial services startups raised less money in 2019 than in 2018 as VC companies looked for late-stage companies and focused on developing markets, according to a new report.
According to the research company CB Insights The annual report released this week, Fintech Startups Around the World, raised a total of $ 33.9 billion * on 1,912 deals * last year, compared to $ 40.8 billion they earned by participating in 2,049 Had collected deals in the previous year.
It is a comprehensive report that you should read in full here (your email address is required to access it). Below is some important information.
- Early-stage startups struggled to attract money: According to the report, funding for startups wishing to close Seed or Series A fell to a five-year low in 2019. On the other hand, the money flowing into Series B startups or beyond was at a record high of five years.
- Emerging and frontier markets were the focus of most of the action: South America, Africa, Australia and Southeast Asia reached their annual highs last year.
- Asia outperformed Europe in the second half of last year in both the number of transactions and most of the capital raised, In the third quarter, European startups raised $ 1.6 billion through 95 deals, compared to $ 1.8 billion that Asian startups had accumulated in 157 deals. A similar story was in the fourth quarter: European startups took part in 100 rounds to raise $ 1.2 billion, compared to $ 2.14 billion * raised by Asian startups in 125 deals * ,
- 24 new fintech unicorns created in 2019: 8 fintech startups, including Next Insurance, Bight Health, Flywire, High Radius, Ripple and Figure, achieved unicorn status in the fourth quarter of 2019, and 16 others made it onto the list later in the year.
- Insurtech sectoror startups like Lemonade, Hippo, Next, Wefox and Bright Health, which offer insurance services, got a big boost last year. They raised $ 6.2 billion last year, up from $ 3.2 billion in 2018.
- Startups that develop solutions such as accounting and tax services as well as payroll and payment solutions for small and medium businesses also received the nod from VCs. In the U.S. alone, where more than 140 startups operate in this area, $ 4 billion was raised. Such startups are emerging in many other markets. In India, for example, Open and NiYo are building neobanks for small businesses, and both raised money last year.
- Almost 50% of all funds for fintech startups were concentrated in 83-mega rounds (With a size of $ 100 million or more.) According to the research company, 2019 was a record year for such rounds around the world, except in Europe.
- The funding of startups based in Germany reached a year high: 65 deals in 2019 resulted in an increase of $ 1.79 billion compared to 56 deals and an increase of $ 757 million in 2018 and 66 deals and $ 622 million in 2017.
- Financial startups in Southeast Asia (SEA) They raised $ 993 million in 124 rounds in their best year in 2019.
* The CB Insights report includes a $ 666 million funding round from Paytm , Some news agencies incorrectly reported that the $ 666 million increase was part of the $ 1 billion round that the Indian startup announced weeks earlier. We have adjusted the data accordingly.