Web: Global Fintech Funding has Fallen Dramatically

August 2016 by: From The Web

After significant growth in Q1 2016, global VC-backed fintech funding in Q2 2016 dropped back to levels closer to those seen in Q4 2015, according to data from KPMG and CB Insights. 


Funding reached $2.5 billion in Q2 2016, down 49% from $4.9 billion Q1 2016, and down 52% from $5.2 billion in Q2 2015. Deal numbers in Q2 also declined to 195 from 221 in Q1, and 218 in Q2 last year. The data only includes VC-backed funding rounds, and therefore doesn't count other sources of fintech funding — Ant Financial's $4.5 billion round in April is excluded, for example. 


Here are the key events in fintech funding from Q2 2016:




  • A lack of super rounds drove the overall decline. In Q1, Chinese fintech Lu.com raised $1.2 billion, and JD Finance, a subsidiary of e-commerce giant JD.com, raised $1.0 billion. Without these deals, fintech funding in Q1 would have been $2.7 billion. This suggests that fintech funding is actually plateauing. 




  • In the US, insurtech and alt lending continue to win. US insurtech saw a boost in Q1 when health insurer Oscar attracted $400 million in funding, and in Q2 another health insurer Clover continued the trend with a smaller but still significant $160 million round. Alt lender Affirm raised $100 million.




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