Refresh

This website londonlovesbusiness.com/fintech-start-ups-investments-reached-highest-ever-on-record-in-2018/ is currently offline. Cloudflare's Always Online™ shows a snapshot of this web page from the Internet Archive's Wayback Machine. To check for the live version, click Refresh.

Home Business NewsFintech start-up investment reached highest ever on record in 2018

Fintech start-up investment reached highest ever on record in 2018

by LLB Reporter
6th Feb 19 10:09 am

The latest Fintech M&A Market Report from international technology mergers and acquisitions advisor, Hampleton Partners, reveals that 2018 witnessed the highest level of investment in fintech start-ups on record, with a total disclosed transaction value of $30.8 billion.

As fintech start-ups mature, the average funding round has doubled in size compared to 2017, with the average venture round in the Asia-Pacific region reaching almost double the global average.

The stellar fintech M&A transaction value of $50 billion from 189 transactions achieved in the first half of 2018 was not replicated, however, as second half activity cooled, recording 160 transactions and a total disclosed transaction value just shy of $13 billion. The decrease in value was largely due to the absence of disclosed blockbuster deals akin to Blackrockโ€™s $17 billion acquisition of Thomson Reuters in 1H2018.

Trailing multiples on a 30-month median basis continued their upward movement: revenue multiples reached 3.0x, up from 2.9x in 1H 2019, while EBITDA multiples reached 15.3x, up from 15.0x in 1H2018.

Jonathan Simnett, director and fintech specialist at Hampleton Partners, said:

โ€œIn 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.

โ€œRetail 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.โ€

Key trends

  • The adoption of biometric technologies is becoming widespread amongst consumers, with 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
  • 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
  • The UK leads the way in Europe, breeding a new generation of innovators with record levels of investment in 2018. Yet despite these start-ups capturing a growing share of the market, even the biggest British fintech firms are dwarfed byย  Americaโ€™s Stripe, Robinhood and SoFi. These, in turn, are outclassed by Chinaโ€™s Ant Financial, recently valued at $150 billion
  • As funding grows more selective, scrutiny of business fundamentals is on the rise

Jonathan Simnett concluded:

โ€œGoing 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.โ€

Leave a Comment

You may also like

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]