Analysis

Fintech by the numbers

Incumbents, startups, and investors adapt to fintech evolution

From disruptive threat to enabling partner, fintech has entered a new phase of its evolution. Our insights track the development of the fintech market and examine how banks, insurers, and investment management companies are tackling fintech transformation initiatives.

Deloitte’s fintech interactive tool—newly updated!

Do you follow the fintech movement? View Deloitte’s fintech interactive tool to stay updated on changes in the fintech market. This interactive tool tracks fintech startup and investment activity across banking and capital markets, insurance, investment management, and real estate. See below for some notable trends through the first quarter of 2022, based on Venture Scanner-reported data as of April 1, 2022, that we’ll continue to track.1

A very strong rebound in fintech investment levels was seen throughout 2021. While it may be too early to say that trend has reversed, the numbers for the first quarter of 2022 do not compare favorably to those of the same period last year.  Here are some of the highlights, with comparisons to the same period in 2021:

  • Fintech investment decreased to $28.2 billion, down 16% from $33.8 billion.
  • There were a reported 574 funding events directed towards 451 companies, compared to 773 funding events across 600 fintech companies.
  • When compared to Q1 2021, only BankTechs saw a 12% increase in funding, accounting for 66% of the total. Meanwhile, InsurTechs saw a 57% decrease (representing 9% of the total), InvestTechs had a 45% decrease (10%) and PropTechs a 32% decrease in funding (15%).
  • However, M&A deal value saw an uptick, increasing by 46% to $11.0 billion compared to $7.5 billion in Q1 2021. But the number of deals fell 13% to 48.
  • Only 2 companies went public, raising a total of $0.4 billion, versus 7 companies and $3.1 billion in the same period last year.
  • Companies headquartered in the following five countries accounted for 81.3% of the total funding in Q1 2022: US based companies received $13.3 billion (or 47.0% of the total); followed by those in the UK with $5.0 billion (or 17.7%); France with $1.9 billion (or 6.6%); India with $1.5 billion (or 5.2%); and Brazil with $1.4 billion (or 4.9%).
  • Four venture capital (VC)-backed fintech launches were reported in Q1 2022. Overall, the data shows 82 VC-backed fintech launches in 2021, 214 in 2020, and 331 in 2019.2 However, it’s important to note that these numbers could change in the subsequent quarters due to the time taken for new launches to be formally announced.

With a significant volume of VC-backed funding entering the industry, we may see more competition in the fintech space. With that said, growth seems to be slowing down at the later stage investments, with a 14% decrease in Q1 2022 compared to Q1 2021. 2021 saw great innovative strides taken in the fintech industry in areas like smart contracts, mobile wallets, and paperless lending among others. As we look ahead into the rest of 2022 this trend is not likely to plateau. With incumbent financial institutions looking to expand their technology investments, we may see more innovation and increased collaboration with incumbents.

1 Source: Venture Scanner data ; Deloitte Center for Financial Services analysis.
2 All data is retrospectively updated by Venture Scanner as and when new information becomes publicly available. Therefore, the number of new launches for 2022 as well as previous years may change in subsequent releases.

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