Following a drop off in the fourth quarter of 2015 (Q4 15) at US$0.5 billion, fintech investment in Asia reversed course in first quarter of 2016 (Q1 16) to hit a new high of US$2.6 billion.
Total investment in fintech companies globally hit US$5.7 billion in Q1 16, with venture capitalists (VC)-backed fintech companies drawing US$4.9 billion in funding.
China accounted for US$2.4 billion of Asia fintech funding, and 49 percent of fintech funding across all geographies, primarily as a result of more than US$1 billion funding rounds to JD Finance and Lu.com.
These findings were part of the Pulse of Fintech report, a quarterly global report on fintech VC trends published jointly by KPMG International and CB Insights.
The report also revealed that North America saw both fintech funding and deals rebound following a major drop in Q4 15, as VC-backed fintech companies raised US$1.8 billion across 128 deals, an increase of 80 percent in funding quarter-over-quarter.
Deal activity to VC-backed fintech companies in North America is on pace to reach a new high this year at the current run rate, as the 128 fintech deals registered over the three-month period was the largest quarterly total since Q2 15.
Europe also saw VC-backed fintech deals reach a five-quarter high, rising from 37 in Q4'15 to 47 in Q1'16. Europe fintech funding remained almost level with Q4 15's total at US$0.3 billion. UK funding rounds to WorldRemit and LendInvest pushed UK funding to account for over half of Europe's fintech funding total.
Commenting on the report, Anand Sanwal, CEO at CB Insights,said: "While fintech startups continue to attract large investment both in the U.S. and abroad, and investors gravitate to areas yet untouched by much tech innovation including insurance, recent events and public market performance suggest that growth-stage fintech fundraising will be harder to come by moving forward in 2016."
Lyon Poh, Head of Digital + Innovation, KPMG in Singapore, noted: "In Singapore, we have seen a flurry of activities in line with the government's push for financial institutions to adopt innovative technology. For example, many insurers are building innovation centres and programmes to rapidly identify and adopt fintech solutions to bring innovation back into their core businesses. This has in turn encouraged more fintech startups to come to Singapore and use it as a base for developing their propositions, and for fund raising."
Brian Hughes, Co-Leader, KPMG Enterprise Innovative Startups Network and Partner, KPMG in the US concluded: "Q1 16 was a strong quarter for venture capital investment in the fintech sector. However, recent challenges at several high profile, publicly-traded fintech companies, may well dampen private investor enthusiasm moving into Q2."
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