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.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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