Lending

March 2018 FinTech Funding – Lending, Neobanks Topped the Charts

MEDICI

In March 2018, FinTech startups around the world raised $3.49 billion worth of VC investments across 137 deals. This was a whopping 75.6% YoY growth in the total funding raised compared to March 2017. In terms of MoM growth, in March 2018, the global FinTech funding value grew by a staggering 150% from the $1.4 billion raised in February 2018.

The US continued to dominate the funding charts with $2.01 billion, which was 57.5% of the global FinTech funding in March. The UK was a distant second with a 11.6% ($405.2 million) contribution, with Germany, China, and India contributing 7.2% ($252.7 million), 5.3% ($184.2 million) and 3.6% ($125.1 million) respectively.

Lending startups led the funding race in March 2018 with $806.2 million in funding across 18 deals, with key startups such as Credit Karma (Credit scoring, $500M), Mighty ($105M), and Oodle Car Finance ($100M) raising big funds. There was a staggering 202% MoM growth in the funding in this space from February 2018. US-based lending startups raised 97% of the global funding.

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The most interesting development in the previous month was the emergence of neo-banks in the funding race. Ranked second in terms of FinTech segments with the highest funding in March, startups in the neo-banking space raised $586.7M across five high-value deals across the globe, with the leading players such as N26 ($160M) and Atom Bank ($207M) wooing the investors and raising some large deals. What was the most interesting is the fact that $586.7 million was raised across just four large deals, with Solaris Bank ($69.7 million) and Brazil’s NuBank ($150 million) being the other two players who raised funding.

Investment Platforms ($549.5M) and InsurTech ($410M) were the other two segments which raised over $400M of funding. In the Investment Platforms segment, there were two large deals raised by Robinhood ($350 million) and eToro ($100 million). Investment Platforms saw the highest MoM growth this month (319%) compared to Feb. 2018. InsurTech, which topped the charts in Feb, saw 44% MoM growth this month with companies such as Oscar ($165 million), Root Insurance ($51 million), and Atomwise ($45 million) raising large funds.

The payments segment which stood third in terms of funding in February, was comparatively low-funded this month with $158.5M raised across 10 deals. In terms of MoM growth, Payments saw a 19% decline in the total funding in March, as compared to February. Payment companies such as Pine Labs ($82M) and Stripe ($38 M) raised a good amount of funding.

The other two segments which garnered significant attention from investors in March were AI/ML and Security, Fraud & Authentication. The startups in the AI/ML space raised $218.5 million across five deals, with a 114% of MoM growth from February. China-based WeCash raised a large deal in this space, with $160 million in funding. In the Security, Fraud & Authentication space, the startups raised $211.9 million across 16 deals, with a 152% MoM growth from February. Sift Science ($53M), Netsparker ($40M), and BioCatch ($30M) were some of the companies in this space who raised a good amount of funds in March 2018.

Diwakar Mandal

MEDICI

Diwakar is a FinTech enthusiast and an avid researcher who spends his time learning and writing about market trends, traction and disruptions in the industry. He has been active in the financial services consulting space for over four years.