Fintech investors: Enthusiastic yet strategically picking their spots


The 2019 fintech industry saw trends of continued and higher funding for older venture capital (VC)-backed startups and an increased focus on global diversity.

February 12, 2020

An article by Jim Eckenrode, managing director, Deloitte Center for Financial Services, and Gaurav Vajratkar, senior analyst, Deloitte Support Services India Pvt. Ltd

We’ve been tracking the global fintech landscape for over two years now, beginning with our Fintech by the numbers report and most recently with Driving innovation in investment management: Learning from and partnering with invest-techs. While we continue to update and track the Fintech marketplace and investments, we thought we’d provide our readers with an update as of year-end 2019.

The evolving global fintech landscape

Our recent analysis and research show that fintech startups received over $69 billion in funding in 2019; a growth of nearly 17 percent from the $59 billion invested in 2018. Indeed, this continues a multi-year growth trend.

Furthermore, at year end 2019 there were 34 fintechs that have received at least $1 billion in funding globally formed since the year 1998, with a collective total investment of over $105 billion. The average time taken to get to receive $1 billion funding is 8 years for fintechs formed since the year 1998 to 2019.

Source: Deloitte Center for Financial Services’ analysis of Venture Scanner data

This past year saw more than 1,500 deals across the globe. From a regional lens, North America has always been at the forefront for startup formation and funding, with Asia and Europe trailing behind. But things are starting to change. Our analysis shows that global fintech funding in 2019 saw a significant uptick of deals in Europe and Asia. European funding activity saw a 105 percent increase year over year (YoY), North America saw a 73 percent YoY increase, while Asia saw a 50 percent decrease in funding mainly due to the fact that a single payments fintech in China received a $14 billion funding round in 2018. Putting that single event aside, funding in Asia actually increased by 0.2 percent YoY. Companies located in the United States accounted for 56 percent of total funding in 2019, while those in the UK garnered 12 percent, with India at 9 percent, China 4 percent, and Brazil 2 percent. Overall, these five countries accounted for 84 percent of total 2019 funding.3

New fintech locations emerging

Our geographic analysis found that companies headquartered in New York accounted for 25 percent of all 2019 funding, while San Francisco and London account for another 25 percent combined. These three locations continue to lead the way as fintech headquarters, but new pockets are emerging in many other locations. Singapore, Toronto, Chicago, Austin, Berlin, Los Angeles, Boston, Mumbai, Seattle, and Palo Alto are developing hubs for new fintech formations.4

What should be the focal point for fintechs?

While investments in fintechs were at an all-time high in 2019, there was a drastic drop in number of new fintechs founded. Our data shows that only 20 new fintechs were founded in 2019 (see Figure 2), compared to 70 in 2018 and 257 in 2017. Since 2008, there have been 4,867 fintechs founded in total.5

As the market evolves and matures, fintechs that are unable to evolve their solutions or meet revenue expectations will likely continue to find it difficult to attract investors or partners. Indeed, investors seem less interested in committing capital to more recently founded companies. Our analysis shows that investors in 2019 have continued to focus on companies founded roughly five to ten years ago. Looking at the $69 billion invested in 2019, 40 percent was allocated to companies founded during 2012 to 2015, while 36 percent of funding was secured by companies founded in the years of 2008 to 2011. This is not a new trend. In fact, over each of the last five years, companies founded in the years 2012 to 2015 have received the lion’s share of investment. Older companies formed between 1998-2007 seem to be past their sell-by date and show a decline in their funding since 2017, while newer companies’ investment inbound has grown consistently.6

Source: Deloitte Center for Financial Services’ analysis of Venture Scanner data

Will the fintechs formed in the years 2012 to 2015 be the next major category and continue to attract more investors and investments?

Clearly the fintech market continues to evolve, and we will continue to track the developments over time. Be on the lookout for our Banking & Capital Markets specific fintech research in the coming months. We would love to hear about your experiences with incumbents or fintechs. In the meantime, view Deloitte’s interactive tool to gain an in-depth view of the fintech market and access our fintech article collection to read more on this topic.

What do you think?

Will the high investment trend in fintech continue? Will there be a sudden spike in new startups being formed?
Join the conversation on Twitter: @DeloitteFinSvcs.


1 Venture Scanner data as on 6 January 2020, analyzed by the Deloitte Center for Financial Services
2 Ibid
3 Ibid
4 Ibid
5 Ibid
6 Ibid

QuickLook is a weekly article from the Deloitte Center for Financial Services about technology, innovation, growth, regulation, and other challenges facing the industry. The views expressed in this article are those of the author and not official statements by Deloitte or any of its affiliates or member firms.