In the face of tough market conditions at the start of this year, fintech firms seem to be recording better performance.
Figures from PitchBook, a data specialized firm, shows that venture capital (VC) totaling $1.8 billion was received by fintech startups in the first quarter (Q1) of 2016. This is a 13% increase from what was raised in the same quarter of last year, and a 44% increase from the $1.25 billion that was raised in the fourth quarter (Q4) of 2015.
A total of 106 deals were closed in Q1 of 2016, a 4% increase from Q4 of 2015. However, this was a 10% decrease year-over-year.
Generally, the fluctuation in the sector has not been very big. This is despite the fact that funding dropped by 66% in Q4 of 2015. Everybody agrees that this drop was due to the abnormal funding raised in Q3 of 2015. During this quarter, around $3.7 billion were being invested in fintech startups.
In the past 5 years, there have been a total of 1,846 deals in the fintech sector which have raised venture capital amounting to $22.4 million. During this same period, a total of 1,252 venture capitalists have participated in those deals. Since Q1 of 2014, at least $1 billion in venture capital has been invested in the sector during each quarter. The top investors with some of their investments are as follows:
- Digital Currency Group establishes and supports blockchain and bitcoin companies. It has invested in 35 companies including Tradeblock, Bitpay, Ripple and Grayscale.
- Sequoia Capital has made 30 investments including Prosper, Square and WeLab.
- SV Angel has made 28 investments including Kabbage, TransferWise, LendUp and Credit Karma.
- Blockchain Capital offers support to startup managers involved in blockchain technology leverage. They have made 27 investments including Coinbase, BitFury, Freshpay and Kraken.
- Andreessen Horowitz and Index Ventures – each of them have made 22 investments. Andreessen has invested in Coinbase, LendUp and Dwolla, among others, while some of Index’s investments include TransferWise, Wealthfront and Osper.
- Accel and Nyca Partners – each have invested in 21 companies
- Kima Ventures has made 20 investments.
- QED Investors has made 19 investments.