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THE MONTH IN NUMBERS
The month in numbers… $17.4 BILLION… Overall global VC investment for FinTech increased by 10.9 % to $17.4 billion in 2016
with 1,436 deals, according to statistics compiled through PitchBook by UK industry association, Innovate Finance.
UK VC investment for FinTechs was down 33.7% at $783 million, less than two thirds of the 2015 total of $1.2 billion. Nine of the top 20 UK deals closed post-Brexit, with total investment after the referendum results of $368 million. Starling Bank, iwoca, Nutmeg, SETL, and BillFront rounded up the top five FinTech deals in the UK, all over $30 million in deal size. Key areas were alternative lending and financing, challenger banks (20%), wealth management (10%) and money transfer and FX (10%).
China, meanwhile, outpaced the US for the first time in deal value at $7.7 billion while US investment decreased in 2016 by 12.7% to $6.2 billion, despite being the global leader in volume at 650 deals. The top three global FinTech deals came from China, with Alipay,
Lu.com and JD Finance leading the charge and raising over $6.7 billion collectively. Alipay raised the biggest FinTech VC round in history in 2016 at $4.5 billion. InsurTech, Oscar, led the US rounds, pulling in $400 million.
80%… Infosys Finacle has released the results of its survey ‘Blockchain Technology: From Hype to Reality’. Among
the headline figures, 80% of bankers said that they expected to see commercial adoption of blockchain by 2020. Almost half added that their companies were investing or planning to invest in the technology in 2017.
Roll-outs would be prioritised in a few key areas where the most impact might be felt, according to the report. Improvements in transparency, automation and settlement time make the tech a perfect fit for the trade finance and cross-border payments spheres. The study further revealed the top five use cases that are expected to go to production are: cross border payments, digital identity management, clearing and settlement, letter of credit process and syndication of loans. These use cases scored more than 3.2 on a scale of one to five.
40%... RBC’s CEO Dave McKay says the Canadian FI wants to spend at least 40% of its overall tech budget on
innovation, such as artificial intelligence and blockchain, rather than maintaining legacy systems. A few years ago, the bank spent more than 80% on keeping the lights on. It is looking to get that down to at least 60% and McKay says it’s halfway there. “We’ve been able to shift a huge amount of spend, over hundreds of millions of dollars, into growth and development,” he comments.
$1.9 BILLION… SoFi has raised $500 million in Series F
financing led by Silver Lake, bringing the US online finance startup’s total equity funding to $1.9 billion. It plans to use the cash to accelerate its expansion into new product areas and countries outside of the US. Other investors included SoftBank Group and GPI Capital.
SoFi, best known as an online lender targeting HENRYs (high earners, not rich yet) with student loan refinancing and other services, originated $8 billion in loans, up from $5 billion in 2015, and expanded its member base to 225,000 from 100,000. It boosted its product offering with the introduction of a Student Loan Payoff Refi for home mortgages and
student loans in partnership with Fannie Mae. The venture also unveiled its SoFi at Work brand for employee financial wellness, SoFi Wealth for modern investment management, and a partnership with Protective to offer term life insurance.
www.ibsintelligence.com © IBS Intelligence 2017
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