Global WealthTech investment peaked at the end of 2016 as Q1 2017 exceeds Q1 2016 in both total investment and total deals
- Q1 2017 investment figures show positive signs for WealthTech growth, with both total investment and total deals exceeding the levels in Q1 2016.
- Q4 2016 was the largest quarter in the period with $753.5m invested, while Q2 2016 attracted the most deals.
- The total deals and total funding increased by 47.7% and 24.9% year-on-year, respectively.
- Q1 2017’s total investment was driven by a $102m (£83m) investment into Durham-based Atom Bank in early March, which was the largest investment to come in the quarter for WealthTech. The next biggest deal of the quarter was for a fellow challenger bank of Atom Bank’s, the Berlin-based firm Raisin, who received a €30m ($32.3m) Series C round back in January.
WealthTech grows consistently throughout 2014-2016 as 2016 sees the FinTech sub sector nearly double in overall investment volume
- The total investment in 2016 was greater than 2014 and 2015’s total investment combined.
- Despite the total investment nearly doubling from 2015 to 2016, the total deals only grew by 5.8%, which meant the average deal size grew by 68.2%.
- WealthTech investments grew at a CAGR of 53.3% during 2014-2016.
- The top 2 deals in WealthTech over the last 3 years were received by China-based companies U51.com and Jubao Interconnection Technology, who received Series C and A funding rounds totalling $310m and $200m, respectively.
- Other notable deals in the period included a $124m (£82m) venture round for Atom Bank, and a $100m investment into New York-based Betterment. These investments ranked third and fourth respectively during the 2014-2016 period.
2017 set to be a strong year for Europe after Q1 2017 sees record quarterly investment for the region
- Europe attracted the most investment in Q1 2017. Asia and North America both saw investment fall in the opening quarter of 2017 whereas Europe’s nearly trebled in size.
- Asia received the most funding of the 3 major continents with almost $950m worth of funding, followed closely by North America and then Europe.
- The largest quarter for any region was Asia’s Q4 of last year, with over $400m investment across 12 deals. The largest of these deals was received by London-based Robo Advisor Nutmeg, in a £30m ($37.7m) Series C round. However, in Q2 2016, North American WealthTech received 37 separate funding rounds, over 80% of the total deals in Asia during the whole of 2016.
Personal Finance sees consistent yearly growth, as Online Banking dominates the WealthTech sector in Q1 2017
- The expansion of Personal Finance within WealthTech is apparent. The sub sector grew consistently year-on-year between 2014 and 2016, eventually increasing its share of funding by 16% across the period.
- Over the course of 2014-Q1 2017, the sub sector with the largest share over any period was Online Banking during Q1 2017, during which it received over half of WealthTech’s overall funding.
- Conversely, Retail Investing & Trading has seen its market share dwindle with relative consistency. In Q1 2017 it only had 16% of the overall funding compared to the 39% it had back in 2014.
- From 2014-Q1 2017, only Online Banking’s sector proportion of overall funding rose. This can be attributed to Atom Bank’s recent funding round.
Conclusion
WealthTech is on the rise. The increasing popularity of new technologies in tandem with more and more people gaining more financial independence globally has resulted in funding for the FinTech sub sector hit record levels in 2016.
For 2017, Europe looks well set to take the reins of a sector in which Asia saw great interest in in 2016. Online Banking is gaining traction in a world with the amount of people having access to financial technologies is increasing by the day. Q2 2017 looks like it could be a very active period indeed for investments inyo WealthTech.
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