Fintech funding in Q1'20 tumbles to lowest level since 2017: study
A study carried by consultant CB Insights on fintech funding worldwide in the first quarter of 2020 shows the extent of the Covid-19 pandemic's impact on the fintech universe.
CB Insights' data suggests that Q1'20 has been the worst first quarter for fintech deals since 2016 and the worst Q1 for funding since 2017. In the three first months of 2020, venture capital-backed fintech funding totalled $6.1bn across 404 transactions (vs. $9.6bn across 500 deals in Q4'19 and $7.1bn across 538 deals in Q1'19).
The consultant stressed that investors coped with recession forecasts by withdrawing from early-stage deals (seed and Series A) to focus on strengthening their portfolios. Thus, with 228 deals numbered for $1.1bn, early-stage fintech startups posted a 13-quarter low in the number of deals and a nine-quarter low in funding.
From a regional standpoint, only Europe observed a rise in funding quarter-on-quarter. This was driven by four mega-rounds, including Revolut’s $500m Series D as well as Qonto’s $115m Series C rounds. Fintech funding dropped quarter-on-quarter in other regions. CB Insights calculated fintech funding in Asia decreased 69% QoQ to $883m in Q1'20 while the number of deals fell 23% QoQ.