Fintech investment hits record high in 2018

Global investment in fintech start-ups reached the highest level on record during 2018 with a total disclosed transaction value of $30.8 billion, according to a report published on Thursday.

Image of a hand holding a microchip illustrating an article about Fintech investment
The latest Fintech M&A Market Report from international technology mergers and acquisitions adviser Hampleton Partners, said that, as fintech start-ups matured last year, the average funding round doubled compared to 2017, with the average venture round in the Asia-Pacific region reaching almost double the global average.However, Hampleton reported that the stellar fintech M&A transaction value of $50 billion from 189 transactions in the first half of 2018 was not replicated in the second half of the year, when there were 160 transactions and a total disclosed transaction value of just under $13 billion."The decrease in value was largely due to the absence of disclosed blockbuster deals akin to Blackrock’s $17 billion acquisition of Thomson Reuters in the first half of 2018," said the report.

The UK leads fintech in Europe

Jonathan Simnett, director and fintech specialist at Hampleton, said: “In the latter half of 2018, the UK continued to lead the way in fintech in Europe, breeding a new generation of innovators with record levels of investment following the lead of new unicorns like Monzo and Revolut.“Retail banking has led the charge in upgrading digital consumer experiences, whilst incorporating fintech into core banking products, whereas investment banks have been more focused on integrating robo-advisory services.”

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The report identified a key trend as the widespread adoption of biometric technologies among consumers, including the growing use of smartphone fingerprint authentication and facial recognition for payments."Though AI continues to show promise as firms adopt algorithms and advanced modelling techniques for investment decisions, change is more likely to resemble a gradual process than a quantum leap into new data sources and methods," said Hampleton."Winners in fintech are primarily emerging at a regional rather than global level, in similar fashion to traditional retail banking, reflecting differing business and regulatory conditions."

Fintech investment: US and China lead the way

The report said that while the UK leads the way in Europe, breeding a new generation of innovators with record levels of investment in 2018, even the biggest British fintech firms were dwarfed by  America’s Stripe, Robinhood and SoFi. "These, in turn, are outclassed by China’s Ant Financial, recently valued at $150 billion."Mr Simnett added: “Going forward, it is anticipated that the largest fintech firms will soon realise value through IPO in 2019. Meanwhile, most start-ups that have grown large enough to gain traction, attract a strong customer base and produce a profitable balance sheet, will remain small enough to be acquired by fintech and traditional incumbents leading to an ongoing process of consolidation and M&A.”Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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