2019 was the most active year for fintech financing, mergers and acquisitions (M&A), and initial public offerings (IPOs), according to a new report by Financial Technology (FT) Partners.
Fintech funding in 2019
Fintech companies raised a total of US$44.6 billion in funding through 1,813 transactions, making 2019 the largest year ever in terms of deal count, up 10% from 2018, and the second largest year ever in terms of dollar volume, according to FT Partners’ 2019 Fintech Almanac.
The year saw a record of more than 100 mega-rounds of US$100 million and more take place, the most ever in a year. Ten of these deals were over US$500 million.
North America represented 51% (US$22.89 billion) of fintech funding volume and 47% (858) of deal counts. Notable deals include Bright Health (US$635 million), Chime (US$700 million), UiPath (US$568 million), and Clover (US$500 million).
North America is followed by Europe with US$10 billion raised by fintech companies through 502 deals, among which Greensill (US$1.455 billion through two rounds, UK), Klarna (US$460 million, Sweden), and OakNorth (US$440 million, UK).
Though in 2019 North America led the world in fintech funding, four of the year’s top five largest rounds occurred outside North America. In particular, the report notes increased fintech funding activity coming from emerging markets, including Africa, the Middle East and South America, which reached record levels.
Notable fintech deals from these markets include Paytm (US$1 billion, India), Beike (US$800 million, China), Danke Apartment (US$500 million, China), Nubank (US$400 million, Brazil), and Multiplus (US$305 million, Brazil).
According to the report, 2019’s most active fintech investors (follow-ons included) were Sequoia, Accel, Ribbit Capital, Tiger Global, Andreessen Horowitz, and Coinbase Ventures.
In 2019, the most active fintech segment was banking/lending tech with companies in the sector raising US$17 billion in volume through over 600 financing deals.
Challenger banks in particular was a hot market in 2019, with 35 companies, including Chime (US), OakNorth (UK), Nubank (Brazil), N26 (Germany) and Judo (Australia), each raising US$20 million or more in financing across 14 countries, the report says.
Banking/lending tech is followed by payments with US$8.2 billion being raised through 302 deals, and financial management with US$7.6 billion raised through 270 deals.
Fintech M&A and IPOs in 2019
2019 was also the largest year ever for fintech M&As, with a record of US$233.8 billion in M&A volume through 989 transactions, a 84% increase in dollar amount compared with the previous year, and a new all-time high in deal count, the report says.
23 of these transactions were valued at US$1 billion or higher, and five of the six largest fintech M&A transactions to ever happen took place in 2019.
According to the report, the high M&A volume was driven by massive consolidation in the payments space with three of the largest transactions being acquisitions of payments processors: FIS’ US$43 billion acquisition of Worldpay, Fiserv’s US$41 billion acquisition of First Data, and Global Payments’ US$25 billion acquisition of TSYS.
Wealth and capital market tech also saw major transactions with London Stock Exchange Group acquiring Refinitiv for US$27 billion and Charles Schwab acquiring TD Ameritrade for US$26 billion.
The most active acquirers of 2019 were Broadridge (eight acquisitions), NCR (7), Mastercard (7), and Ascensus (7).
2019 saw 30 fintech IPOs globally, a new record high, which raised a combined US$11 billion. These include Freee (Japan), Tyro (Australia), Fawry (Egypt), Network International (United Arab Emirates), Bill.com (US), OneConnect (China), and Tiger Brokers (China).
