The fast growing fintech industry continues to command the attention of investors across the globe. A recent CB Insights report summarized the global financing trends for fintech companies in 2016. There were 836 venture capital-backed financings, which raised $12.7 billion for fintech startups in 2016. While this was a $2 billion drop from 2015 figures, it is a significant increase from 2012’s 451 deals, which raised $2.5 billion. U.S. fintech issuers represented over half of the total number of fintech financings with 422 deals, raising $5.5 billion.
Within the fintech space, funding for blockchain and bitcoin companies accounted for 8% of total deals in 2016, raising $431 million. Companies in the payments tech field, which provide solutions to facilitate payment processing, raised $1.6 billion in 2016 across 150 financings. Insurance tech companies also warrant mention with 109 deals, raising $1.6 billion in 2016.
As privately held companies opt to remain private longer and defer going public, there has been an emergence of “unicorns,” or companies that have a valuation of over $1 billion. CB Insights reports that there are now 190 unicorns with a cumulative valuation of $660 billion. There are 22 fintech unicorns, including 11 U.S.-based fintech unicorns. With increased access to capital, more privately held companies go through numerous rounds of financings, referred to as late-stage financings. Fintech companies ended 2016 with a median late-stage deal size of $26.5 million, accounting for 29% of their total deal share.