Fintech investments in India nearly doubled to $3.7 billion in 2019, making the country the world’s third largest fintech market, according to an analysis from Accenture.
Accenture, which analysed data from CB Insights, a global venture-finance data and analytics firm, said that investment in fintech ventures rose sharply in most major markets in 2019, led by gains in the U.S. and U.K. and emerging economies such as India and Brazil.
Despite those gains, the total value of fintech deals globally dipped 3.7%, to $53.3 billion from $55.3 billion in 2018, when totals were boosted by a record $14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies, the report added.
Investments in payments companies more than tripled to $2.1 billion from about $660 million in 2018, while funding into insurtechs also rose strongly, up 74% to $510 million. The vast majority of funds raised last year in India went into payments start-ups (58%), while insurtechs raked in 13.7% of the investments and fintechs in lending accounted for 10.8% of the total, the data showed.
The value of deals in the U.S. jumped 54%, to $26.1 billion, with the number of transactions rising 6.9%, to 1,232, signalling that investors remain confident about the future growth and demand for innovative digital solutions for banks, insurers and payments providers. The largest portion of U.S. funding went to lending start-ups and those in payments, each accounting for 26% of the total, while insurtechs took in another 18%. The country’s largest deal was the $1 billion that consumer finance fintech Figure Technologies Inc secured from a credit facility in May, the report said.
In the U.K., fintech investments rose 63%, to $6.3 billion — almost the same as the total for 2018 and 2017 combined. Other European markets also made big strides, with investments in German fintechs up 83% in 2019, to $1.5 billion, and fundraising in Sweden jumping more than seven-fold, to $1.3 billion from about $175 million.
The value of deals in Brazil nearly tripled, to $1.6 billion, making the country the world’s fifth largest fintech fundraising center.
Fintech deals in China dropped 92% in 2019, to $1.9 billion, with the $145 million financing from insurtech Shuidi Huzhu in June being the country’s largest transaction. Most of the decline was due to China’s record-breaking fundraising in 2018, which saw four deals alone bringing in nearly $20 billion.
However, there were large fundraising gains elsewhere in Asia Pacific. Investments in India nearly doubled, to $3.7 billion, making the country the world’s third largest fintech market. The value of deals more than doubled in Singapore, to $861 million, and rose nearly 50% in Australia, to $1.1 billion.
“Despite strong demand for fintech globally, it’s likely that, as start-ups become more mature, investments will flow to fast-growing economies, where there’s still a huge, unaddressed consumer and corporate market thirsty for innovations,” said Julian Skan, a senior managing director in Accenture’s Financial Services practice. “For now, there’s still a lot of growth, particularly for challenger banks that are expanding in their home markets and overseas, as well as for payments providers that are embedding solutions seamlessly into our day-to-day activities.”