Solganick & Co. issues FinTech M&A Update for Q1 2017

Solganick & Co. has issued its latest quarterly update for the FinTech industry sector.  You can access the full report here: Solganick Co FinTech MnA Update Q1 2017

The following is a summary of the report:

  • 2017 started off modestly after a year marked by blockbuster deals.
  • Fintech deal value hit $3.2 billion in Q1 combining both venture and M&A investments. With a total of 260 deals closing in the space, the transaction volume steadies at a new subdued level observed over the past three quarters.
  • Major deals include PayPal’s announcement to buy bill payment management company TIO networks for $233 million in cash and $100 million acquisition of ZenBanx, a developer of multi-currency mobile banking platform, by SoFi.
  • The quarter also saw the second most highly valued fintech unicorn in the US, Social Finance (SoFi), raise $500 million at a $4.2 billion valuation.
  • Corporates move beyond traditional direct VC FinTech investment and looked towards building partnerships and alliances with fintech companies.
  • Global fintech deal activity could surpass 2016’s all time high if the rest of the year sustains Q1 2017’s deal pace. US fintech deal activity is on pace to fall below 2013 levels at the current run rate as Europe fintech investment spikes.

 

In Q1 2017, global VC-backed FinTech startups raised $2.7 billion across 226 deals, a rise of 33% on a quarterly basis but 47% drop compared to same quarter last year. Deal Activity rose 12% to a three-quarter high of 226. There were seven $50 million+ financing’s to VC-backed FinTech companies in Q1 2017 compared to 14 in the same quarter last year. The second most highly valued FinTech unicorn in the US Social Finance (SoFi) also raised $500 million at a $4.2 billion valuation.

 

Seed and Series A investment rebounded slightly in the quarter after the early-stage FinTech funding had fell to a 7- quarter low in Q4’16.

Funding to Insurance Tech companies fell 25% on a quarterly basis as investments to Blockchain and Bitcoin companies rebounded to $113 million from last quarter’s $77 million. Payments Tech companies also witnessed a 39% drop in funding while deals rose for the second consecutive quarter.

The race to harness FinTech’s potential is still driving deal making. FinTech will continue to drive the evolution of financial services, disrupting some sub-sectors, enabling new developments in others and providing new and improved infrastructure for the digital age.

You can access the full report here: Solganick Co FinTech MnA Update Q1 2017

 

Solganick & Co. covers the FinTech sector among its broader software and tech-enabled services M&A practice.  For more information, please contact us.

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