Throughout 2013, payment startups received $1.2 billion in funding and investments as a result of 193 business deals.
Payment industry analysis website CB Insights recently published numbers on investments and funding from VC and corporate venture firms into payment oriented tech startups. The report categorized the startups into 5 segments recognized as parts of the payment Industry. Mobile & online payments, POS solutions, money remittance and transfer services, services for under-banked markets, and payment & transaction processing companies were considered payment startups.
Throughout 2013 a total of $1.2 billion was invested in payment startups, the investments spanned over a total of 193 deals, a total growth of 5% when comparing investments in 2012. Mergers and acquisitions (M&A) and IPOs, also known as the “Exit Trend”, saw a drop of 16% than what was recorded the year prior. With the 16% drop in company exits there were big purchases in 2013, like PayPal’s acquisition of BrainTree for example. PayPal’s president David Marcus predicted more M&As would happen in 2014.
The top investment firms were 500 Startups, Andreessen Horowitz, Accel Partners, Index Ventures, and Spark Capital. Besides VC and corporate venture firms, financial firms such as MasterCard, Citi, and American Express invested in numerous payment startups, most notably Square, iZettle, and SumUp. Intel Capital was the largest corporate investor of 2013 with long list of investments in the payment industry.
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With the amount of startups and companies entering the market with innovative ideas, 2014 should prove no different and show numerous investments from venture capital and corporate firms in the payment startup space.
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