According to research conducted by Comprar Acciones, the total value of global fintech investments fell by 16% between the second and third quarter, down to $12.15 billion.
While the total value of fintech investment fell, deal volume actually grew by 26%, with 716 new deals closed during Q3. Of this number, the US accounted for 64.7%, with their 340 deals bringing in a total valuation of $7.85 billion.
Around 60% of the total funding was raised through the 25 ‘mega-rounds’ which took place during the period, with the value of these phenomena increasing by 64%, up to $6.4 billion.
One fintech subsector that soared during Q3 was the payment industry, with deal volume bouncing 14% and total value increasing by 41.9% quarter-on-quarter to $6.22 billion – according to Global Data.
The top five deals in the segment accounted for 58.4% of the total. Klarna bank had the highest raise, at $650 million at a post-money valuation of $10.65 billion. This development saw it take its place as the highest valued private fintech in Europe and the fourth highest globally.
The buy now, pay later platform had 12 million monthly active users and 55,000 daily downloads. In H1 2020, its global transaction volume shot up by 44% YoY to $22 billion as revenue soared by 36% YoY to $466 million.
Elsewhere, the insurtech sector raised $2.5 billion globally across 104 deals according to Willis Tower Watson. It marked a 63% increase in funding value and a 41% growth in deal volume. The number of mega-round deals in the segment increased by 50% quarter-on-quarter. The Comprar Acciones research statement added:
“Six mega-rounds drove 69% of the total insurtech funding. Top on the list was Bright Health with $500 million and another $500 million by Ki. Early stage companies in the sector grew by 57% QoQ during the period, compared to a record low of 42% in Q2 2020.”
With an active but less valuable quarter for the fintech sector coming to a close, a recent and huge missed opportunity for the sector: the Ant Group IPO. Set to be launched by Alibaba mastermind, Jack Ma, the fintech was expected to have the largest stock market entry of all time. Unfortunately, Chinese authorities snuffed its entry at the last moment, with Bloomberg predicting that even if the company takes a second pass at listing, the blocked IPO might wipe as much as $140 billion off of its value.