Fintechs are sought-after investment targets: A study by KPMG shows that the investment volume in startups from the financial sector more than doubled in the second quarter compared to the first months of 2017.
While $3.6 billion flowed into financial startups in the first quarter of this year, the figure rose to $8.4 billion in the second quarter. The survey includes venture capital and private equity, as well as mergers and acquisitions.
Europe was able to grow with the trend, securing almost a quarter of global FinTech investments: $2 billion flowed into European startups. In the previous quarter, the figure was $880 million.
Study identifies trends
The study identifies two major trends: First, among the ten largest deals, three companies already have products aimed at other companies. KPMG partner Sven Korschinowski says:
"The trend toward B2B applications is likely to intensify in the future because banks have realized that they need to drastically reduce their costs. Fintechs with banking licenses are increasingly entering the market as competitors, with a cost-to-revenue ratio that is only a third of that of a traditional bank."
The study authors also see a trend toward RegTechs, startups that solve regulatory problems. In the first half of 2017, $591 million flowed to such companies in 60 deals. In all of 2016, the number was 91 deals and $994 million. Korschinowski expects a "busy third quarter of 2017," saying:
“There is also likely to be a lot of activity in areas such as blockchain, digital currencies, and the insurance sector by the end of the year.”
