Investor interest in the fintech space remains strong, with an increase in fundraising in most markets during 2019, according to an Accenture analysis of CB Insights data.
Payments and lending companies received the most funding in the U.S. last year, the company said, with both receiving 26% of the total investment. They also took the lead globally, with payments companies accounting for 28% of fundraising and lending startups accounting for 25%.
“Despite strong demand for fintech globally, it’s likely that, as startups become more mature, investments will flow to fast-growing economies, where there’s still a huge, unaddressed consumer and corporate market thirsty for innovations,” Julian Skan, a senior managing director in Accenture’s Financial Services practice, said in a press release.
“For now, there’s still a lot of growth, particularly for challenger banks that are expanding in their home markets and overseas, as well as for payments providers that are embedding solutions seamlessly into our day-to-day activities.”
Accenture also noted that the number of deals was continuing to rise, but at a slower growth rate overall, as more mature markets slowed down while emerging fintech markets are picking up the pace. While the number of deals in 2019 grew 6.9% in the U.S. and 2% in the U.K., deal volume grew at 52% in Singapore, 37% in Germany, and 79% in Sweden.
“The healthy growth in activity bodes well for the near-term outlook of the fintech industry, particularly as we see more established players interested in implementing the newest technologies through partnerships with startups, which are also eager to launch their solutions to incumbent financial firms’ large consumer base,” Piyush Singh, senior managing director at Accenture and leads of its Financial Services practice in Asia-Pacific and Africa, said.
The company found that the value of investments overall in the U.S. was up 54% to $26.1 billion in 2019, and the number of transactions was up 6.9% to 1,232.
The value of deals in the U.K. rose 63% to $6.3 billion and deals in Brazil nearly tripled to $1.6 billion. India became the third largest fintech market globally with investments nearly doubling to $3.7 billion.
In China, on the other hand, the value of deals dropped 92% to $1.9 billion, following the country’s record-breaking 2018 in which four deals raised almost $20 billion. This decline contributed to an overall decline deal value globally of 3.7%.