December 2, 2014
At Let’s Talk Payments, we have been keeping track of prominent investments in the payments industry. Here are some exclusive insights that we have come across:
1.) In 2013 & 2014 combined, finance/lending companies attracted $567 Mn in funds, the largest compared to other categories. Payments rails companies raised $416 Mn while Mobile Wallet companies raised $286 Mn.
2.) Comparing the investment trend among countries for the two years, countries like Sweden and Israel raked in prominent investments in 2014 and made it to top 10 countries in terms of invetments. Canada attracted good amount in investment in 2013 but could not do so in 2014.
3.) Considering finance/lending companies, AvantCredit raked in massive funds worth $425 Mn in 2014, contributing majorly to the category. In 2013, the company raised substantial funds worth $79 Mn.
4.) Considering payment rails category of companies, they raised a total of $156 Mn in 2014. The chart depicts the top 10 companies with Stripe contributing more than half of the amount.
5.) Considering mobile wallet companies, they raised a total of $52 Mn in 2014 with Dashlane and Powa Technologies contributing majorly to the category.
Other insights that we wish to highlight are:
1.) Investments in the payment sector has gone up globally at a significant pace in recent years. According to a recent study, USD 960 Mn was invested across 219 deals in 2013 and USD 1327 Mn was invested across 95 deals in 2014. The central Europe, Middle East, Africa and Emerging Asia markets each grew by more than 20% in payments, which prompted venture capitalist and startups to work in payment space.
2.) Global investment in fintech ventures has risen over 3 times during the last five years, from less than $930 Mn in 2008 to over $2.97 Bn in 2013. The global volume of non-cash payments grew by 8.8% to reach 307 billion in the year 2012, which encouraged new payment startups in the global payment space.
3.) Venture capital investment in payment technologies hit a five-year high in committed capital in the first quarter of 2014, when 59 start-ups raised $492 million for technologies to support existing payments companies.
4.) The Payments Industry has embraced disruptive technological change but rather slowly. We see that there is synergy between the core players in payments and venture-backed start-ups. The value-added services that technology companies can provide through software and big data analysis will play a big role in improving the bottom lines of different players in the payment space in the next few years.
5.) In 2013, Investors invested a sum total of around $1025 Mn in companies of payments domain. Mobile Wallet companies and those providing white label solutions raised maximum funds in 2013 amounting to around $250 Mn. The companies under the category Payment processing / payment gateway / rails followed the Mobile Wallet / White label category raising a total of $177 Mn in 2013.
6.) In 2014, Investors invested a sum total of around $1334 Mn in companies of payments domain. Finance and Lending companies raised maximum funds in 2014 amounting to around $448 Mn. The companies under the category Payment processing / payment gateway / rails followed the finance and lending category raising a total of $267 Mn in 2014.