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Global Fintech Report Q1 2019
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3
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and interesting companies that might signal a shift in
technology or require us to reallocate resources.”
Beti Cung, Corporate Strategy, Microsoft
4
June 11 - 13, 2019
New York, NY
events.cbinsights.com/future-of-fintech
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events.cbinsights.com/future-of-insurance
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Contents
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Q1’19 Financing Trends
Quarterly Deals & Dollars
Regional Trends
Q1’19 Top VC-Backed Fintech Deals
Fintech Unicorns
21
64
Q1’19 Fintech Sector Trends
Appendix:
Major markets financing trends
Most Active Fintech Investors Q1’18 - Q1’19
Methodology
7
India challenges China for the top Asian fintech market: India was the top
Asian market for VC-backed fintech funding in Q1’19 with $286M in
funding, narrowly surpassing China. China saw funding fall to $192M, a 89%
drop QOQ. India and China both saw 29 deals.
In Q1’19, Europe beat Asia in funding and the US remained the top market
for deals with 170 investments worth $3.3B: Europe saw funding grow to
$1.7B, surpassing Asia which saw $875M in funding in Q1’19. Asia saw 127
deals, beating out Europe.
Q1’19 saw record M&A deals between payment incumbents, more fintech
mega-rounds to support staying private, and lackluster IPO activity: The
quarter saw 2 record-breaking acquisitions between payment incumbents:
Fiserv acquired First Data for $41B in January and FIS acquired Worldpay
for $43B in March. Q1’19 saw 13 $100M+ financing deals to VC-backed
fintech companies. Q1’19 only had 1 unicorn IPO with Tiger Brokers.
Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover
companies funded solely by angels, private equity firms, or any debt, secondary, or line of credit
transactions. All data is sourced from CB Insights.
Summary of findings
Q1’19 VC-backed fintech funding dropped but deals remain strong: In the
first 3 months of 2019, VC-backed fintech companies raised $6.3B across
445 deals globally. Deals were up 4% quarter-over-quarter (QOQ) while
funding dipped 13%.
Asia saw funding fall as a result of tighter regulatory oversight in China:
Fintech funding in Asia fell below $1B for the first time in five quarters.
Funding dropped to $875M, a 67% drop QOQ. Deals grew to 127 supported
by strong growth in India, which saw 29 deals.
Late-stage deal share grew to a 5-quarter high as investors continued to
concentrate bets in perceived winners: Global Series D and Series E+
fintech deals grew to 8% in Q1’19. US early-stage deal share was flat QOQ
as investors continued to concentrate their bets in established fintech
unicorns.
There are 41 VC-backed fintech unicorns worth a combined $154.1B:
Q1’19 saw three new unicorn births (N26, Chime, and Airwallex) and three
in the first month of Q2’19 (Bill.com, Liquid, and Lemonade). The cohort’s
total valuation in 2019 continues to grow as a result of continued mega-
rounds to existing unicorns, including Klarna and Stripe, among others.
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LENDING
BLOCKCHAIN/
CRYPTO
REGTECH
PERSONAL
FINANCE
PAYMENTS/
BILLING
MONEY
TRANSFER/
REMITTANCES
WEALTH
MANAGEMENT
CAPITAL
MARKETS
MORTGAGE/
REAL ESTATE
INSURANCE
GLOBAL FINTECH
REPORT Q1’19
Marketplace lending & alternative
underwriting platforms
Payments processing, card developers,
& subscription billing software tools
Tools to manage bills and track
personal and/or credit accounts
Audit, risk, and regulatory
compliance software
Companies leveraging blockchain
technologies for financial services
Companies selling insurance digitally or providing
data analytics and software for (re)insurers
Sales & trading, analysis, and infrastructure
tools for financial institutions
Investment and wealth management
platforms and analytics tools
International money transfer
and tracking software
Mortgage lending, digitization,
and financing platforms
WHAT THIS REPORT COVERS
9
$16.5
$19.4
$18.3
$40.3
$6.3
1,191
1,304
1,564
1,829
445
2015
2016
2017
2018
2019
Global fintech funding hit $6.3B in Q1’19
Annual global VC-backed fintech deals and financing, 2015 – Q1’19 ($B)
G L O B A L F I N T E C H D E A L S A N D D O L L A R S S T A R T 2 0 1 9 S T R ONG
10
$2,764 $4,997 $6,417 $2,319 $5,402 $8,495 $2,970 $2,561 $3,266 $5,797 $4,649 $4,563 $6,174 $20,750 $6,110 $7,282 $6,320 266
299
342
284
350
326
313
315
391
405
386
382
470
466
466
427
445
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19
VC-backed fintech deals rebounded in Q1’19 after dip
Quarterly global VC-backed fintech deals and financing, Q1’15 – Q1’19 ($M)
Q 1 ’ 1 9 D E A L S C L O S E T O R E C O R D H I G H S
11
$2,595.4
$3,483.6
$3,120.9
$3,571.8
$3,492.0
$2,159.3
$2,203.8 *
$1,928.7
$2,612.6
$874.7
$1,083.3
$942
$804.9
$803.7
$1,713.0
$0.6
$61.3
$30.3
$11.2
$66.9
$56.6
$25.4
$204.7
$72.0
$130.6
$278.8
$33.9
$20.7
$210.8
$42.6
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
Europe pulled ahead of Asia for fintech funding for
the first time in five quarters
Global VC-backed fintech funding by continent, Q1’18 – Q1’19, ($M)
*Ant Financials' $14B round in Q2’18 was excluded from the chart represented on this slide for illustrative purposes
Africa
South America
Europe
North America
Australia
Asia
12
Q1’19 fintech deals fell below Q1’18 totals in most
markets
Global VC-backed fintech deals by continent, Q1’18 – Q1’19
Note: Charts not to scale
2
8
10
8
8
7
4
7
8
5
20
14
16
9
14
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
Africa
Australia
South America
228
197
183
163
189
131
157
147
119
127
82
86
103
120
102
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
North America
Asia
Europe
13
60%
58%
54%
63%
60%
18%
20%
24%
20%
23%
7%
6%
6%
5%
8%
15%
16%
16%
12%
9%
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
Mega-rounds continued in Q1’19, boosting late-
stage fintech deal share to a 5-quarter high
Annual deal share by stage to global VC-backed fintech companies, Q1’18 – Q1’19
Mid-Stage
Early-Stage
Late-Stage
Other
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Q1’19: 13 fintech mega-rounds total $2.36B
Global number of fintech mega-rounds ($100M+), Q1’18 – Q1’19
F I N T E C H M E G A - R O UN D I N V E S TM EN T S R EMA I N E D S T R ONG I N Q 1 ’ 1 9
3
5
7
11
7
4
7
4
3
1
4
1
1
1
4
1
1
1
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
North America
Asia
Europe
South America
Australia
15
Company
Deal Date //
Amount Raised
Total Disclosed
Funding Select Investors
Description
Jan’19 // $500M
$925M
($1.2B Valuation)
Greenoaks Capital Management, First
Round Capital, Sequoia Capital
Tech-enabled health insurance carrier
Jan’19 // $300M
$512.6M
($2.7B Valuation)
Insight Venture Partners, GIC, Greyhound
Capital
Digital-first “challenger bank” for retail banking
services that allows customers to open accounts
remotely using just a mobile application
Mar’19 // $250M
$503M
($2.7B Valuation)
Bessemer Venture Partners, Generation
Investment Management, Lead Edge
Capital, T. Rowe Price, Tiger Global
Management, TCV
Restaurant management system
Jan’19 // $240M
$250.2M Fifth Wall Ventures, Foundation Capital
Tech-enabled title insurance carrier
Mar’19 // $200M
$308.8M
($1.5B Valuation)
Coatue Management, Dragoneer, DST,
Forerunner Ventures, General Atlantic,
ICONIQ Capital, Menlo Ventures
Digital-first “challenger bank” for retail banking
services that allows customers to open accounts
remotely using just a mobile application
Top 9 global fintech deals in Q1’19
The top deals to VC-backed fintech companies were all mega-rounds ($100M+)
*Indicates unicorn deal
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Company
Deal Date //
Amount Raised
Total Disclosed
Funding Select Investors
Description
Mar’19 // $125M
$164.3M CreditEase Fintech, Goldman Sachs,
Mubadala Ventures, Salesforce Ventures
Tech-enabled insurance platform
Jan’19 // $125M
$205.9M Benchmark, Index Ventures, Sequoia
Capital
Open-source data streaming platform
Mar’19 // $114M
$178.2M
Index Ventures, PayPal, Ribbit Capital,
Thrive Capital
Wealth management marketplace
Jan’19 // $105M
$263.8M
($800M Valuation)
CNBC, Blackrock, Bain Capital Ventures
Digital wealth management provider or robo-
advisor
Top 9 global fintech deals in Q1’19
5 of the top 9 deals went to VC-backed fintech companies in the US
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41 FINTECH UNICORNS
$154.1 BILLION
G L O B A L L Y T H E R E A R E
V A L U E D , I N A G G R E G A T E , A T
18
SWEDEN
EUROPE
$5.3B
$1.6B
$3.45B
$8B
$1.24B
$1B
NORTH AMERICA
$22.5B Valuation
$1.2B
$3.2B
$4B
$2.9B
$2B
$2.1B (as of Q2’15)
41 fintech unicorns valued at $154.1B
Global VC-backed fintech companies with a private market valuation of $1B+ (4/25/19)
UNITED KINGDOM
$1B
$4.5B (as of Q1’17)
SOUTH AMERICA
$4B Valuation
BRAZIL
$3B
$1B
$1.2 - $1.6B
$2.7B
$1B
$1.7B
$1.9B
$2.7B
$1.27B
$1.1B
$1B (Q2’19)
AUSTRALIA
$2B (Q2’19)
$2.36 - $2.8B
Valuation
$1.8B
AUSTRALIA
$1B Valuation
UNITED STATES
GERMANY
$2.7B
$1.5B
$10B
CHINA
INDIA
ASIA
$1.4B
$38B Valuation
$1B
$1.5B
$1B
SOUTH KOREA
$1.2B
$1B (Q2’19)
JAPAN
19
SWEDEN
EUROPE
$5.3B
$1.6B
$3.45B
$8B
$1.24B
$1B
NORTH AMERICA
$22.5B Valuation
$1.2B
$3.2B
$4B
$2.9B
$2B
$2.1B (as of Q2’15)
Q1’19 saw 3 new fintech unicorn births
UNITED KINGDOM
$1B
$4.5B (as of Q1’17)
SOUTH AMERICA
$4B Valuation
BRAZIL
$3B
$1B
$1.2 - $1.6B
$2.7B
$1B
$1.7B
$1.9B
$2.7B
$1.27B
$1.1B
$1B (Q2’19)
AUSTRALIA
$2B (Q2’19)
$2.36 - $2.8B
Valuation
$1.8B
$10B
CHINA
INDIA
ASIA
$1.4B
$38B Valuation
$1B
$1.5B
$1B
SOUTH KOREA
$1.2B
$1B (Q2’19)
JAPAN
AUSTRALIA
$1B Valuation
UNITED STATES
GERMANY
$2.7B
$1.5B
20
SWEDEN
EUROPE
$5.3B
$1.6B
$3.45B
$8B
$1.24B
$1B
NORTH AMERICA
$22.5B Valuation
$1.2B
$3.2B
$4B
$2.9B
$2B
$2.1B (as of Q2’15)
And Q2’19 is on track to see more new unicorn rounds
UNITED KINGDOM
$1B
$4.5B (as of Q1’17)
SOUTH AMERICA
$4B Valuation
BRAZIL
$3B
$1B
$1.2 - $1.6B
$2.7B
$1B
$1.7B
$1.9B
$2.7B
$1.27B
$1.1B
AUSTRALIA
$2.36 - $2.8B
Valuation
$1.8B
AUSTRALIA
$1B Valuation
GERMANY
$2.7B
$1.5B
$10B
CHINA
INDIA
ASIA
$1.4B
$38B Valuation
$1B
$1.5B
$1B
SOUTH KOREA
$1.2B
$1B (Q2’19)
$2B (Q2’19)
UNITED STATES
$1B (Q2’19)
JAPAN
Marqeta was finalizing plans to raise at least
$250M at a valuation of about $2B, nearly
quadrupling its value from two years ago.
March 26, 2019
The image part with relationship ID rId2 was not found in the file.
#AhaCBI
Q1’19 Fintech
Sector Trends
22
MACRO SECTOR
TRENDS
BANK TECH
WEALTH
MANAGEMENT
REGTECH
INSURTECH
CAPITAL
MARKETS
PAYMENTS
GLOBAL VC-BACKED
FINTECH Q1 ’2019
DIGITAL
BANKING
23
MACRO SECTOR
TRENDS
GLOBAL VC-BACKED
FINTECH Q1 ’2019
DIGITAL
BANKING
24
Challenger banks continued funding tear in Q1’19
VC-backed deals and financing trends to digital banking startups, Q1’18 – Q1’19 ($M)
$734.2
$472.4
$277.6
$449.7
$704.6
17
11
18
15
17
-4
1
6
11
16
21
26
$(100.0)
$100.0
$300.0
$500.0
$700.0
$900.0
$1,100.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
25
Challenger banks continue to spread globally
26
56
100
120
150
200
210
450
500
500
600
600
600
796
1,300
1,500
1,700
2,300
3,000
4,000
5,000
Tide
Loot
Lunar Way
Pockit
Greenlight
Financial
Starling
Bank
Varo
Acesso
Uala
Monese
Tandem
Neon
Gimi
Qapital
NuBank
NuCanta
Monzo
N26
Chime
Revolut
NuBank
Challenger banks are no longer a niche in fintech
Digital banking companies have attracted millions of customer accounts (in thousands)
Nu Canta
27
Digital challenger banks deal flow continued in Q1’19
Note: This chart includes non-VC-backed equity investments
A host of different
challenger bank
startups raised
equity funding in
Q1’19.
The top two
rounds to
challenger banks
minted new
unicorns, N26 and
Chime.
0
28
B R E A K I N G G R O UN D I N N EW MA R K E T S
N26 is a licensed challenger bank based in Germany
that has amassed over 2.3M reported retail
customers since launching in 2014.
N26 has been leveraging the European Economic
Area’s banking passport to expand to other EU
countries. N26’s core products include a mobile app,
digital checking and savings accounts, and
connected debit card supported by Mastercard. N26
also offers business, freelance, and premium
accounts. Next up, N26 is expanding in the US and
the UK and considering Latin America. In the US, they
are looking to launch cash back rewards.
Last Funding
$300M Series D // Q1’19
Select Investors
Insight Venture Partners, Allianz X, Tencent
Holdings, Valar Ventures
Valuation
$2.7B
B AN K A C C O UN T F E A T U R E S
R E T A I L , F R E E L A N C E , & B U S I N E S S A C C O UN T S
29
B AN K I N G O N M I L L E N N I A L S
Chime is a mobile banking app that provides a
checking account-like service through a
partnership with Bancorp and debit cards
through Visa. The account is free to open and
provides $0 ATM access and overdraft
protection. Additional services include a two-
day payday advance for customers that direct
deposit their paycheck to Chime and optional
round ups savings accounts.
In April 2019, Chime reported the company had
opened 3M accounts.
Last Funding
$200M Series D // Q1’19
Select Investors
Crosslink Capital, Forerunner Ventures, Menlo Ventures,
Northwestern Mutual Capital, Omidyar Network, Homebrew
Valuation
$1.5B
30
C ON S UM E R C R E D I T R EMA I N S A N A R E A O F O P PO R T UN I T Y F O R T E C H S T A R T U P S
Petal is an alternative credit card issuer with 100,000
pre-launch sign-ups as of October 2018. Petal targets
the 65M Americans that are uncreditworthy or are
“credit invisible” and do not meet the traditional
qualifications for a credit line with a bank. Petal’s
back-end bank partner is Web Bank.
Petal uses an in-house algorithm that leverages
machine learning and supplemental data (like income,
short-term debt, and outstanding loans) to
alternatively underwrite a consumer’s credit risk.
Select Investors
Ride Ventures, Rosecliff Ventures, Story Ventures, Valar
Ventures, Afore Ventures, Brooklyn Bridge Ventures
Last Funding
$34M Series D // Q1’19
Valuation
$107M
31
More cross-over cards to come from every corner
UK only
Select insurgent fintech startups and public contenders planning to launch credit and debit cards
Credit Partner TBD
DEBIT
CREDIT
PRIVATE FINTECH
PUBLIC CONTENDERS
VS.
32
Apple Card emphasizes privacy over perks
Apple introduced the Apple Card in March 2019 as a pillar in its strategy to bet big on subscription
services. Apple Card prioritizes security over discounts, keeping data & cash in the Apple
ecosystem, and providing services that integrate seamlessly across its software and hardware
stack, consistent with Apple’s broader strategy. Existing incumbents don’t have this.
F R OM C A R D S T O A C C O UN T S , C O U L D A N A P P L E C H A L L E N G E R B A N K B E N E X T ?
33
MACRO SECTOR
TRENDS
WEALTH
MANAGEMENT
GLOBAL VC-BACKED
FINTECH Q1 ’2019
34
Wealth tech deals came roaring back in Q1’19
VC-backed deals and financing trends to wealth tech startups, Q1’18 – Q1’19 ($M)
$613.9
$926.0
$525.8
$469.0
$845.1
50
42
49
37
46
0
10
20
30
40
50
60
$(100.0)
$100.0
$300.0
$500.0
$700.0
$900.0
$1,100.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
35
+
Acorns grows to 5M customers with $1B in AUM
A C O RN S I S A C T I V E L Y P U R S U I N G OMN I C H ANN E L P A R TN E R S H I P S F O R D I S T R I B U T I O N
S E L E C T P A R TN E R S H I P S
Jun’18
Feb’19
Feb’18
Jan’19
Select Investors
NBC Universal, Blackrock, Paypal, Bain, Nyca, The Rise
Fund, Sound Ventures, Greycroft, Point 72, e.Ventures
Last Funding
$105M Series E // Q1’19
Valuation
$860M
Q1’19 announcements:
• Acorns took a strategic investment from NBC Universal
• NBC Universal started creating financial literacy content
for Acorns Grow as part of the investment
• Acorns Spend debit card went live
•
To increase offline visibility, Acorns sponsored Roush
Fenway Racing to partner with Nascar driver Ryan Newman
36
Stash adds 2.5M accounts and active investments
S T A S H I S L O O K I N G T O D I V E R S I F Y I N V E S TM EN T O F F E R I N G
Select Investors
Union Square Ventures, Valar Ventures, Breyer
Capital, Coatue Management, Entree Capital,
Goodwater Capital
Last Funding
$65M Series E // Q1’19
Valuation
$405M
Q1’19 announcements:
•
Stash added “stock back” rewards, linked to its spending
cards, which are fractional investments in diversified ETFs
on a rotating basis
•
In one month, Stash fulfilled 500K rewards
•
Stash bank accounts and debit cards went live
B AN K P A R TN E R
37
Early-stage wealth tech startups are diversifying
investing beyond the robo-advisory stack in the US
Select Q1’19 wealth tech deals
Focus: Diversifying IRAs with
alternative asset classes
Q1’19 Funding: $2.8M Seed
Select Investors: Sequoia
Capital, Fondation Capital
Focus: 1099 and gig-economy
benefits platform
Q1’19 Funding: $5.1M Series A
Select Investors: NYCA, Khosla
Ventures, Kindred Ventures
Focus: Retirement planning
and income distribution
Q1’19 Funding: $1M Series A-II
Select Investors: Inspired
Capital, Anthemis, Point72
Focus: Financial healthcare and
wellness benefits for employers
Q1’19 Funding: $2.8M Seed
Select Investors: PJC, TT
Venture, Y Combinator
38
MACRO SECTOR
TRENDS
CAPITAL
MARKETS
GLOBAL VC-BACKED
FINTECH Q1 ’2019
39
Capital markets tech deals grew but funding drops
with shift to M&A deals in Q1’19
Global capital markets tech VC-backed fintech financing trends, Q1’18 – Q1’19, ($M)
$1,188.2
$2,104.5
$1,213.6
$1,399
$1,031.4
80
60
55
55
60
0
10
20
30
40
50
60
70
80
90
$-
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
40
Morgan Stanley acquires Solium Capital for $900M
to win underwriting business ahead of tech IPOs
E Q U I T Y M ANAG EM EN T I S H E A T I N G U P W I T H T H E L A R G E S T D E A L T O - D A T E
Valuation: $1B
Potential opportunities for Morgan Stanley:
• Cross-selling Solium’s clients into the
wealth management business
• Raising the investment bank’s
underwriting business as the tech IPO
market heats up
• Solium acquired Capshare in 2017 which
remains operational
41
Carta helps venture capitalists, as well as startup employees and other stakeholders, track and
manage the shares that they own. It also helps companies manage other aspects of their stock,
such as fair-market valuations and secondary sales.
Carta's product becomes more useful as more startups stay private longer and have more
complicated capitalization tables, though some of its customers have also gone public while
continuing to use the service. The company has plans to expand to help venture capital firms'
limited partners, such as endowments and pensions, manage their portfolios.
Financial Management Startup Carta Is
Raising $300M From A16Z At A $1.8B
Valuation
42
Cap markets tech brings private markets out of the dark ages
and protects startup employees
Q1’19 Funding: $2M Seed // Fuel Ventures
Focus: Capdesk is a private equity management
platform designed to digitize and provide
liquidity for the billions of pounds (GBP) of
employee shares in unlisted European
companies.
Capdesk is similar to Carta’s initial software
offering in the US and is one of a number of
equity management software providers cropping
up globally to help startups, VCs, and employees.
Q1’19 Funding: $20M Series B // Citi,
Nasdaq, Galaxy
Focus: Symbiont is a blockchain company
developing products in smart contracts and
distributed ledgers for the capital markets.
In February 2019, Templum partnered with
Symbiont's Assembly for its regulated, end-to-end
solutions for raising capital and secondary
trading platform.
Q1’19 Funding: $35M Series B // Munich Re
Q2’19 Funding: Undisclosed Minority // BNP
Focus: Forge, FKA Equidate, is a settlement and
custody partner for investors and shareholders in the
private markets.
In March 2019, Forge acquired IRA services to expand
into custody and reduce switching friction for users.
In April 2019, Forge partnered with BNP Paribas to
originate and distribute new investments with exposure
to pre-IPO and private markets.
LIQUIDITY
CAP TABLE MANAGEMENT
ISSUANCE
+
43
MACROS SECTOR
TRENDS
INSURTECH
GLOBAL VC-BACKED
FINTECH Q1 ’2019
44
Insurtech funding surged on the back of 3 mega-
round investments in Q1’19
Global insurtech VC-backed fintech financing trends, Q1’18 – Q1’19, ($M)
$711.8
$556.4
$1,167.7
$800.6
$1,574.7
66
62
47
46
58
-5
5
15
25
35
45
55
65
75
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
$1,600.0
$1,800.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
45
Mutual aid platforms take off in China to
crowdfund medical coverage
Q1’19 Funding: $74M Series B // Tencent, BlueRun Ventures
Focus: Shuidihuzhu is a mutual aid platform in China that allows
members to raise money for diseases that require high medical fees.
Members pay a small upfront fee into a pool of funds that pays out
when a member is diagnosed with a serious disease such as lung
cancer. Shuidihuzhu also brokers health insurance policies to members.
Most plan participants are from rural cities. Shuidihuzhu has paid out
more than 400M yuan to more than 3,000 people to date.
SHUIDIHUZHU
XIANG HU BAO
Launch: October 2018 by Ant Financial
Focus: Xiang Hu Bao is Ant Financial’s mutual aid platform, which
provides lump-sum payouts for 100 critical injuries or diseases based
on payments collected from its members. The service, which is
available to anyone 30 days old to 59 years old, has acquired over 50M
customers in less than six months.
Ant charges an 8% administrative fee for every payout and reportedly
hopes to sign up more than 300M users within two years.
46
Mix of European insurtech startups raise growth
financing in Q1’19
Q1’19 Funding: $45M Series B // DST
Global, Index Ventures
Focus: Alan is a Paris-based startup operating as
a licensed private health insurer providing
coverage beyond the basic reimbursements
provided by France’s national healthcare system.
Alan also provides digital tools such as a maps
product to find nearby doctors. Alan grew from
5,000 policyholders to 27,000 in 2018, focusing
on freelancers and small businesses.
Q1’19 Funding: $125M Series B //
Mubadala Ventures
Focus: Wefox Group is a Berlin-based startup that
owns Wefox, an insurance management app, and
One, a digital liability insurer for personal
insurance coverage.
Wefox currently serves more than 400K
customers and 1,500 brokers, with 80% of
customers on the Wefox platform coming via
brokers.
Q1’19 Funding: $60M Series C // BVP, Accel
Focus: Shift Technology is a Paris-based startup
providing software tools to detect fraudulent insurance
claims.
Shift works with more than 70 global customers
including CNA in the US, MACIF in France, and AXA in
Spain.
Shift is expanding into claims automation with a SaaS-
based solution that augments existing processes and
integrates into core systems.
FRAUD
HEALTH INSURANCE
INSURANCE BROKERAGE &
LIABILITY INSURER
47
MACRO SECTOR
TRENDS
REGTECH
GLOBAL VC-BACKED
FINTECH Q1 ’2019
48
Regtech saw drop in funding but slight recovery in
deals in Q1’19
Global regtech VC-backed fintech financing trends, Q1’18 – Q1’19, ($M)
$385.1
$450.6
$546.8
$686.8
$337.8
39
31
30
21
25
0
5
10
15
20
25
30
35
40
45
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
49
A payday lender in disguise? New York
investigates the Earnin app
April 3, 2019 |
UniCredit Bank AG hit with $1.3B fine by U.S.
Justice Department
April 17, 2019 |
Regulators find compliance gaps
R E G U L A T O R S C O N T I N U E T O C R A C K D OWN O N B O TH I N C UMB E N T S A N D S T A R T U P S
50
“We continue to be disappointed with Wells Fargo Bank
N.A.’s performance under our consent orders and its
inability to execute effective corporate governance and a
successful risk-management program. We expect
national banks to treat their customers fairly, operate in
a safe and sound manner, and follow the rules of law.”
March 15, 2019, OCC public rebuke of Wells Fargo Bank
March 28, 2019, Tim Sloan, Wells Fargo CEO retired
R E G U L A T O R S A R E MO R E EM B O L D E N E D T H AN E V E R
51
Startups fight crime and counter terrorism with AI and APIs
Q1’19 Funding: $9M Series A
Select Investors: Canaan, Broadhaven
Regulations: AML, Fraud
Focus: Beam helps fintechs, banks, broker-
dealers, and cryptocurrency companies to
streamline workflows, lower false positives,
and centralize data to comply with
regulations. The company’s API-based
platform conducts transaction monitoring
with the data and helps customers
proactively identify suspicious activity.
Q1’19 Funding: $7.5M Series A
Select Investors: Jungle Ventures, Illuminate
Regulations: AML, Reconciliation
Focus: Tookitaki provides end-to-end
machine learning applications for
reconciliation. Tookitaki’s REST APIs and AI
are auditable and scalable for compliance
with financial services regulations.
Q1’19 Funding: $30M Series B
Select Investors: Index Ventures, Balderton
Regulations: AML, CFT
Focus: ComplyAdvantage supports a suite of
plug-and-play cloud services including REST
APIs, automated onboarding, and continuous
monitoring for compliance risks.
The company helps firms comply with
regulations relating to sanctions, anti-money
laundering (AML), terrorist financing (CFT),
bribery, and corruption.
52
Next-gen regtech startups are combating identity fraud
with biometric authentication and continuous monitoring
Focus: Socure verifies digital identities by combining machine
learning with trusted datasets to authenticate identities in real time.
Socure provides services to lenders, card issuers, banks, e-
commerce, and digital payments.
In December 2018, Socure partnered with Alloy to offer financial
institutions better customer “risk scoring,” aiming to reduce the
number of false positives in fraud analysis.
Feb’19 // $30M Series C
Select Investors:
Two Sigma, Santander, Flint Capital
Focus: Onfido is a digital identity company that provides
verification software for background screening and
onboarding.
Onfido uses machine learning to remotely validate a person's
identity document and compares it with their facial
biometrics. The identity can then be checked against
international credit bureaus and watchlists.
Apr’19 // $50M Series D
Select Investors:
Salesforce, SBI Group
53
MACRO SECTOR
TRENDS
PAYMENTS
GLOBAL VC-BACKED
FINTECH Q1 ’2019
54
Payments incumbents look to consolidate plumbing
and infrastructure with record M&A deals
Source: SEC FORM 8-K
In January 2019, Fiserv announced its $41B
acquisition of First Data
Fiserv provides card-based solutions for banks and
non-bank issuers.
• Combined with First Data’s merchant acquiring
services, FIS will touch end-to-end payments
chains including card issuing and core
processing, networks services, e-commerce, and
integrated payments.
• Consumers and merchants could benefit from the
augmented network and consolidated distribution
channels, tightened risk management protocols,
and expanded card-based acceptance solutions.
+
55
FIS acquires Worldpay in a ~$43B deal, the biggest
fintech acquisition of all time
In March 2019, FIS announced its $43B acquisition
of Worldpay
• FIS and Worldpay have complementary solutions
and services encompassing financial
institutions, issuing and acquiring services, and
commerce.
• Consumers and merchants will benefit from the
combined omnichannel payment & multi-
currency capabilities, robust risk & fraud
solutions, and robust data analytics.
• Worldpay has been adding key e-commerce
partnerships including supporting Amazon Pay
outside of Amazon’s marketplace.
VS.
56
K L A R N A I S E X P A N D I N G G L O B A L L Y W I T H A H Y B R I D P A YM EN T S , C R E D I T , & B A N K I N G S U I T E
Select Investors
Permira, H&M, Sequoia Capital, Permira, DST
Global, QED
Last Funding
$108M Private Equity // Q1’19
Valuation
$2 - 2.5B
Klarna is a Sweden-based alternative payments
platform that aims to provide a frictionless buying
experience to buyers and sellers.
2019 announcements:
•
Raised $108M in private equity from Permira and
Sequoia in April 2019
•
Launched a new open banking platform that links
to 4,300 banks and a global authentication
platform
•
In Q1’19, Snoop Dogg angel invested and was the
center of a new marketing campaign
• Partnered with Canada’s PayBright, adding
another 4,000 merchants to the platform
57
Fintech in Africa is growing, payments and
lending remain the top targets for deals
58
Africa’s payments landscape is evolving similarly
to other regions through VC deals and M&A
Q1’19 Funding:
$150K Seed
Select Investors:
Y Combinator
Focus: Wallet.ng is a digital payments
platform that aids transactions by
allowing people to send and receive
money and also make payments using
just their phone numbers.
Q1’19 Update: Similar to the Fiserv and FIS
deals, India’s FSS is looking to frontier
markets to grow their merchant acquiring
business. In March, FSS made a minority
investment in Africa’s Ecentric Payment
Systems, taking a 46% share of the company.
Q1’19 Funding:
$5M Series A
Select Investors:
Y Combinator,
Khosla Ventures
Focus: Kudi provides a mobile app that offers
bill payment through messaging. Features
include bill payment, bill reminders, airtime
purchase, and funds transfer.
59
MACRO SECTOR
TRENDS
BANK TECH
GLOBAL VC-BACKED
FINTECH Q1 ’2019
60
Community lenders say their tech providers aren’t always helping them compete for deposits.
Little known outside the banking world, but their infrastructure now makes up much of the
modern banking system’s financial plumbing, especially for smaller banks.
“The cores” provide the legacy technology behind everything from keeping track of customer
deposits to powering mobile apps. The three biggest core providers today do business with 90%
of US banks with less than $1B in assets.
Frustrated by the Tech Industry, Small
Banks Start to Rebel Against Legacy
Core Providers FIS, Fiserv, & Jack Henry
61
Next-gen bank cores pick up funding and fintech clients
but face high barriers to break into networked banks
Last Funding: $5.4M Series B-II Q2’18
Select Investors:
Insight Venture Partners
2019 Developments: Nymbus is breaking into de novo banks, or
newly chartered banks. Moxy, a new DC-based de novo bank,
received a conditional charter in January 2019 and announced
the selection of Nymbus’ core banking suite.
Nymbus’ suite of services includes SmartCore and SmartLaunch,
a full-service and standalone digital brand alternative.
Select Investors:
ABA, Accenture, First Data Ventures, Live Oak Ventures,
SunTrust Banks, T.N. Incorporation, Woodforest National Bank
Focus: Finxact is developing an enterprise-class public
cloud/private data Core-as-a-Service platform with a
completely open banking API. The Finxact Core will allow
banks to deliver new services for omnichannel consumers.
Last Funding: $30M Series A Q1’19
+
62
Europe sees utility players capitalize on open banking
tailwinds and bank demand for go-to-market solutions
Focus: Mambu is a SaaS banking platform that powers digital
financial services. The company provides flexible, banking
architectures that aim to allow its clients to operate like tech
companies rather than banks. The company is based in Germany.
Select Investors:
Acton Capital Partners, Bessemer Venture Partners, Point Nine
Capital, CommerzVentures
Feb’19 // $34M Series C
Focus: 10x offers a suite of APIs covering process core
automation, compliance reporting, security, and analytics.
10X had a false start in 2018 after losing its largest prospect,
Virgin Money. The company got a fresh injection of funding
from Nationwide, its new marquee client.
Select Investors:
Nationwide Building Securities, Ping An Ventures
Mar’19 // $19.7M Series B
Select customers:
+
63
Ant Financial has accelerated the roll-out of services that share its technological capabilities with
financial institutions. Ant is partnering with Jiangsu-based Hoperun and unveiled its Distributed
Core Banking Platform (DCBP), a next generation banking product designed to help financial
institutions shift from transaction-oriented to customer-oriented and tackle digital challenges,
including distributed development, financial product management and accounting liquidation.
To date, Ant Financial has provided more than 100 technology products and solutions and
collaborated with more than 200 service partners.
Ant Financial Launches Distributed Core
Banking Platform with Hoperun
Information Technology
From financial super app to
full-stack banking, could a
charter be next?
64
Q1’19 global fintech
financing trends
A P P E N D I X :
65
$3.3 BILLION
170 DEALS
U S F I N T E C H V C - B A C K E D E Q U I T Y F U N D I N G I N Q 1 ’ 1 9 :
A C R O S S
66
Q1’19 US fintech deals rebounded after three
consecutive dips, but remained below Q1’18 levels
US VC-backed fintech financing trends, Q1’18 – Q1’19 ($B)
$2.5
$3.4
$3.0
$3.4
$3.3
212
180
169
149
170
$-

$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
67
US early-stage fintech deals rebounded but funding
dropped in Q1’19
US early-stage VC-backed fintech financing trends, Q4’17 – Q4’18, ($M)
US saw a fresh crop of
early-stage startups
raise funding in Q1’19
Early-stage deals took 91 of the
170 deals in Q1’19, representing
54% of quarterly deals. In Q4’18,
early-stage deals took 79 of 149,
or just over 53% of quarterly
deals. Though the total number
of deals grew, early-stage deals
as a percentage of the total were
flat QOQ.
The quarter continued to see
mega-rounds go to scale ups like
Acorns, Stripe, Toast, Chime,
among others.
$624
$618
$518
$678
$491
125
90
85
79
91
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
68
New York is closing in on California as a fintech hub
New York vs. California VC-backed fintech deals, Q1’18 – Q1’19
California deals
dropped to 5-quarter
low
California saw deals drop to
51 in Q1’19, down 43%
compared to Q1’18.
New York saw 44 deals in
Q1’19 which was flat
compared to Q1’18.
The US saw one new fintech
unicorn birth, Chime, a San
Francisco-based challenger
banking startup.
90
67
59
62
51
44
39
38
31
44
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
California
New York
69
$875 MILLION
127 DEALS
A S I A F I N T E C H V C - B A C K E D E Q U I T Y F U N D I N G I N Q 1 ’ 1 9 :
A C R O S S
70
Fintech funding in Asia fell to 5-quarter low in
Q1’19, down 59% from Q1’18
Asia VC-backed fintech financing trends, Q1’18 – Q1’19 ($M)
$2,159
$16,204
$1,929
$2,613
$875
131
157
147
119
127
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
*Spike in Q2’18 was driven by Ant Financials’ record breaking $14B round
71
India tied China as a fintech deal hub in Q1’19
China vs. India VC-backed fintech deals, Q1’18 – Q1’19
China fintech deals
fell off in Q1’19
following regulatory
tightening on online
lending
India and China both saw 29
deals in Q1’19.
China saw deals drop to a 5-
quarter low.
India deals were flat
compared to the same quarter
a year prior.
50
76
71
49
29
29
28
22
18
29
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
India
China
72
$428.2 $454.3 $397.6 $225.1 $285.6 $1,544.5 $1,451.0 $1,091.8 $1,829.7 $192.1 Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
India beat China as a fintech funding hub in Q1’19
China vs. India VC-backed fintech deals, Q1’18 – Q1’19
India overtook China
in funding as China
fintech funding fell
off in Q1’19
India saw funding top $286M
while China only saw $192M
in Q1’19.
China fintech funding hit a 5-
quarter low.
India
China
73
$1.7 Billion
102 DEALS
E U R O P E F I N T E C H V C - B A C K E D E Q U I T Y F U N D I N G I N Q 1 ’ 1 9 :
A C R O S S
74
Fintech deals in Europe decline, as funding hits
$1.7B in Q1’19
Europe VC-backed fintech financing trends, Q1’18 – Q1’19, ($M)
$1,083
$942
$805
$804
$1,713
82
86
103
120
102
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
75
Europe overtook Asia in funding in Q1’19
Global VC-backed fintech funding by continent, Q1’18 – Q1’19 , ($M)
*Spike in Q2’18 was driven by Ant Financials’ record breaking $14B round
North America
Europe
Asia
$2,595
$3,484
$3,121
$3,572
$3,492
$2,159
$16,204
$1,929
$2,613
$875
$1,083
$942
$805
$804
$1,713
Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
North America
Asia
Europe
76
The UK leads as Europe’s top fintech market for funding,
despite Brexit uncertainty
UK vs. Germany VC-backed fintech funding, Q1’18 – Q1’19 ($M)
The UK and Germany
went head-to-head in
funding in Q1’19
The UK led as the top fintech
market in Europe with $645M
invested across 42 deals.
Germany was the second top
market in Europe, with $588M
invested across 15 deals.
Germany saw the largest
funding round in Europe in
Q1’19, a $300M investment to
N26. The deal valued the
challenger bank at $2.7B,
making it Germany’s first
fintech unicorn.
$259.7 $130.4 $175.9 $168.9 $588.4 $552.0 $531.2 $462.5 $395.6 $645.0 Q1'18
Q2'18
Q3'18
Q4'18
Q1'19
UK
Germany
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#AhaCBI
Most active
fintech investors
78
The most active fintech VCs from Q1’18 – Q1’19
By unique fintech company investments (new or follow-on)
Rank
Investor
Select Fintech Investments
1
2
3
3
5
79
The most active fintech VCs from Q1’18 – Q1’19
By unique fintech company investments (new or follow-on)
Rank
Investor
Select Fintech Investments
5
7
8
9
9
9
80
Methodology
CB Insights encourages you to review the methodology and definitions employed to better understand the numbers presented in this
report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights
directly. Additionally, if you feel your firm has been under-represented, please send an email to info@cbinsights.com and we can work
together to ensure your firm’s investment data is up to date.
What is included:
What is excluded:
― Equity financings into emerging fintech companies. Fundings must be put into VC-backed
companies, which are defined as companies who have received funding at any point from
venture capital firms, corporate venture groups, or super angel investors.
― Fundings of only private companies. Funding rounds raised by public companies of any
kind on any exchange (including Pink Sheets) are excluded from our numbers, even if they
received investment by a venture firm(s).
― Only includes the investment made in the quarter for tranched investments. If a company
does a second closing of its Series B round for $5M and previously had closed $2M in a
prior quarter, only the $5M is reflected in our results.
― Round numbers reflect what has closed — not what is intended. If a company indicates
the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount
which has closed.
― Only verifiable fundings are included. Fundings are verified via various federal and state
regulatory filings, direct confirmation with firm or investor, or press release.
― Previous quarterly VC reports issued by CBI have exclusively included VC-backed rounds.
In this report, any rounds raised by VC-backed companies are included, with the
exceptions listed.
— No contingent funding. If a company receives a commitment for $20M subject to hitting
certain milestones but first gets $8M, only the $8M is included in our data.
— No business development / R&D arrangements, whether transferable into equity now, later, or
never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity
financing, nor is it from a venture capital firm. As a result, it is not included.
— No buyouts, consolidations, and/or recapitalizations. All three of these transaction types are
commonly employed by private equity firms and are tracked by CB Insights. However, they are
excluded for the purposes of this report.
— No private placements. These investments, also known as PIPEs (Private Investment in Public
Equities), are excluded even if made by a venture capital firm(s).
— No debt / loans of any kind (except convertible notes). Venture debt or any kind of debt / loan
issued to emerging startup companies, even if included as an additional part of an equity
financing, is not included. If a company receives $3M with $2M from venture investors and
$1M in debt, only the $2M is included.
— No government funding. Grants, loans, or equity financings by the federal government, state
agencies, or public-private partnerships to emerging startup companies are not included.
81
WHERE I S ALL TH IS DATA FROM?
The CB Insights platform
has the underlying data
included in this report
app . cb i n s i gh t s . com/s i gnup