A new report from KPMG media and CB Insights has recently released a report called The “Pulse of Fintech: Q1 2016” giving both company’s quarterly analysis of the fintech sector and venture capital investments. The paper reveals fintech growth is continuing its pace becoming a dominant presence within the global economy. Among financial technology ventures such as new payment processors, robo advisory, Insurance tech, and health tech the consulting agencies also say they expect big growth from the Bitcoin and blockchain space.
As reported by Live Bitcoin News venture capital investment in fintech is feverishly attracting investors in Q1 of 2016. KPMG media and CB Insights detail that $4.9 billion has been invested in fintech companies worldwide across 218 deals made this quarter. Just two of the largest fintech deals in 2016 occurred in China that represents close to half of the overall global funding. The report states Q2 is expected to perform in a similar fashion over the next four months.
KPMG and CB Insights note this quarter has “less focus on payments” within the North American region and insurance technology is gaining popularity on the global level. The consultant firms say that in Q1 of 2016 a number of fintech insurance companies have popped up, and the paper suggests investors watch this landscape of insurance tech over the next few quarters. The paper explains:
“Insurance has long been considered a sector ripe for disruption, similar to banking, even though it has been traditionally much slower to innovate. Part of the challenge is that banking lends itself well to startup companies coming in and focusing on improving one component of the banking process. By contrast, it is difficult to split off a part of insurance and make a sustainable business.”
Another growing sector of the fintech industry according to the “Pulse of Fintech: Q1 2016” is Bitcoin and blockchain innovation. The report says businesses encompass this description stating, “companies here span key software or technology firms in the distributed ledger space, ranging from Bitcoin wallets to security providers to side chains.” The 8th most active investor within the global fintech space according to the report is the company Blockchain Capital (#2 in the U.S.), and the paper also reports the large funding rounds with the two firms Blockstream, and Digital Asset Holdings. Both companies secured $115 million in venture capital injection from legacy institutions and venture capitalists. Lian Zerafa, the National Consulting Financial Services Industry Leader, from KPMG in Canada, believes blockchain tech will be a game changer. Zerafa states in the report:
Image courtesy of KPMG media and CB Insights“When we look 5 years out, the whole blockchain metaphor is likely going to be a serious disruptor for how we’re going to think about any type of transaction – and a transaction isn’t just about money. It’s a contract between two entities.”
The report from KPMG and CB Insights notes that their prediction of fintech growth being just as significant in Q2 comes from the massive investment of $4.5 billion by Ant Financial closed in April. This is the single largest fintech investment within a private funding round atmosphere. The report says this shows that extreme growth will come from Asian territories. Fintech and global investment within the Insurance tech, robo advisory, lending tech, payment processors Bitcoin and blockchain technology sector continue as investors worldwide are heavily focused on these innovative protocols. Conor Moore, National Co-Lead Partner, KPMG Venture Capital in the U.S., explains:
“The demand for alternative financial services continues to be very strong and is fueling the appetite of venture capitalists to fund private companies. It remains to be seen how the recent announcements by LendingClub and Prosper will impact that appetite and whether the balance of power switches back to more traditional financial institutions.”
Source: Pulse of Fintech: Q1 2016
Images: Courtesy of KPMG media, CB Insights and Pixabay