A new survey has suggested that funding for fintech companies hit an all-time high in 2015, but investor appetite for fintech businesses has now peaked.
According to the survey by accounting and advisory firm KPMG and software-as-a-service provider CB Insights, 2015 saw $US19.1 billion invested into fintech companies globally – a massive 106 per cent increase on the amount invested in 2014.
“2015 was a tremendous year for fintech investment around the globe. The evolving needs of digitally savvy consumers and the drive for efficiency, not least to meet regulatory and compliance costs, is propelling innovation in financial services like never before – and investors are taking notice,” said Ian Pollari, global co-lead for KPMG’s fintech practice and head of banking for KPMG Australia.
“Australia has also seen some notable fintech investment, with companies like Prospa, SocietyOne and PromisePay announcing multi-million-dollar rounds in 2015.”
However, the result masks a pullback in investment in the last quarter of the year, leading Anand Sanwal, CEO of CB Insights, to suggest that fintech investment may have seen its peak.
“The interest in fintech remains strong but the pullback does suggest that funding will be tougher to come by and valuations will probably reset a bit as they’d become detached from their underlying fundamentals,” he said.
However, this peak may not be a global phenomenon. While investment in fintechs dropped sharply in North America at the end of 2015, Asian fintech start-ups attracted more investment in 2015 ($US4.5 billion) than in all the four previous years combined.
“Combined with the participation of hedge funds and banks, Asian fintech companies enjoyed a somewhat unprecedented funding environment,” Mr Sanwal said.
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