According to the latest KPMG and CB Insights report on venture deals, the US fintech sector gained 72% in 2015, hitting a record $7.40 billion – that is a giant increase compared to 2014, when the industry collected $4.3 billion.
Although the last quarter brought a cooldown of investment volumes in fintech, the remaining part of the year showed extremely high activity and the involvement of larger entities in the financial services industry. Dynamics and market response significantly accelerated and such scenarios are expected to continue in the coming months.
In the case of global trends, the final results were even better. Equity funding involving venture capital-backed fintech companies shows that 2015 reached a multi-year high, topping 2014 by more than double. The industry deployed almost $14 billion across 653 deals to venture capital-backed fintech firms.
Returning to the US market, the actual amount of concluded agreements increased by only 15 year-over-year (YoY). This may suggest that regarding each individual agreement, the value of the awarded financing rose significantly. In the case of the 10 biggest deals more than $3.3 billion was accumulated, which accounts for more than 44% of all funding.
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As stated by Brian Hughes, National Co-Lead Partner in KMPG, in a recent official presser on the report: “The millennial generation is at the forefront of many of the changes that are occurring. They have grown up with the internet, are more tech savvy than previous generations and like to do everything on-demand from their smart phones. These characteristics are driving a lot of disruption across all industries, especially fintech.”
The report shows however how big the gap is between US and European fintech markets. At the time when companies from USA raised $3.7 billion in funds, those of the EU managed to collect only $350 million. The list of the 26 largest deals in 2015 distinguishes only 3 entities from the old continent (the highest in 17th place). However this does not change the fact that fintech is gaining momentum also in this region, and the results are much better than the previous year’s.
A few months ago, Finance Magnates reported that KMPG increased its interest in the fintech industry through a partnership with Matchi and Cambridge. The conclusion of the new agreement allows for even better potential solutions identification for financial sector clients.