Financial Services Startup Bootcamp
The FinTech sector is not immune to changes in broader market sentiment or geo-politics – and 2016 was a year of unusual volatility. Eurozone anxiety is set to continue with elections in many countries looming large in 2017.
In fact, investment in FinTech globally held up remarkably well during 2016. Innovate Finance data suggests there was $17.4bn worth of VC investment worldwide over the course of the year, a 10.9% increase compared to 2015. However, in the UK there was a different story to tell, as deal value drastically decreased by 33.7% to a total of $783m.
The Fight For Fintech
Fintech is a phenomenon. Just as with other sectors, the tentacles of technology have coiled their way into the financial services industry and traditional firms are feeling the squeeze. Dealmaking in the sector shows no sign of letting up. Research from the consultancy firm KPMG suggests global fintech M&A during 2017 was up sharply compared with 2016, itself a record year. In total, there were 336 such transactions last year worth a total of $18bn – that compares to 236 transactions worth $11.15bn over the previous 12 months.
Financial institutions have substantial firepower at their disposal as they survey forthcoming M&A opportunities. Almost a third of these organisations (31%) plan to allocate $500m or more to fintech investment over the next 24 months, more than double the number that allocated such large sums over the past two years. A further third say they are likely to allocate between $200m and $500m.
