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Global fintech investment on the rise in 2017 lead by US, UK and India; China gets left behind

Global investment in financial technology reached another all-time high in 2017, spurred by the funding for start-ups in the United States, United Kingdom and India, according to an Accenture report from CG Insights.

Fintech financing rose 18% in 2017 around the world, to $27.4 billion, with the value of deals in the US jumping 31%, to $11.3 billion. Deal values almost quadrupled in the UK, to $3.4 billion, and in India, it reached five times the investment a year before – $2.4 billion. The number of fintech deals also rose from over 1,800 in 2016 to nearly 2,700 in 2017.

“Much of the growth, particularly in the US and UK, has been driven by big new investment flows from China, Russia, the Middle East and other emerging economies,” said Julian Skan, senior managing director in Accenture’s Financial Services practice.

He added that B2B fintech models were proving out at the banks, coupled with larger and later-stage investments as the fintech world scales up. The rise of ‘insurtech’ ventures also boosted this growth. India’s boom was driven by strong demand for cashless services following the country’s ‘demonetization’ events.

Total global investment in fintech between 2010 and 2017 reached $97.7 billion, with US start-ups accounting for more than half (54%) of all investments. Fintech startups operating in lending and payments took the bulk of US investments last year, accounting for 60% of the $11.3 billion in the country, the data showed.

The biggest deals

Some of the most sizeable deals an investments this year come from the US. Kabbage, a US online lender for small businesses, alone raised $900 million in three separate rounds in 2017. Online lender Social Finance, also known as SoFi, raised $500 million in February, and LendingPoint raised $500 million from a credit transaction in September.

In the UK, digital insurance distributor BGL Group raised $900 million, pushing overall fintech investments in the country to an all-time high of $3.4 billion. Payments venture TransferWise had the second-largest fundraising in the UK, raising $280 million.

India’s digital payments start-up Paytm received $1.4 billion in venture capital, helping drive fintech fundraising activity in the country to nearly five times the 2016 levels. The number of fintech deals in India increased 65% over 2016.

Lastly, China

China is no longer the top destination for this capital ventures in 2017 as it was in 2016. Fintech funding in the country declined 72% in 2017, to $2.8 billion, from a record $10 billion in 2016, when several companies — including Ant Financial and wealth management platform Lufax — had multi-billion-dollar financing rounds.

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