FinTech has become one of the most exciting sectors for private investment. The success of companies like PayPal and Stripe has kicked off a revolution that appears to be unstoppable. Even traditional banks are investing in FinTech companies.
Accenture reported that investment in FinTech companies tripled from 2013 to 2014. Global investment last year rose to more than $12.2 billion, surpassing Accenture’s prediction that FinTech investments would rise to $6-8 billion by 2018. LendingClub disrupted the financial services sector last December by earning the blue ribbon of technology IPOs with a $1 billion splash in the public pool.
FinTech startups keep raising the stakes higher and higher. Where unicorns used to be a rare event, it seems we might start seeing more of these mythical creatures in the near to mid-term future. The only question left to answer is, who will be the next FinTech superstar?
Whether we’re talking about investment crowdfunding, peer-to-peer lending, mobile payments, or a hot new twist on financial technology, FinTech has now become a place where savvy investors looking to get in on the next big wave can wax their surfboards and ride the tide. Here are the biggest FinTech venture funding rounds to date. I’m sure we’ll see many more.
Last month, SoftBank, a Japanese company, led a $1 billion Series E round for student loan refinancing company Social Finance Inc., better known as SoFi. Earlier in the year, the company raised $200 million in a Series D round, which was at the time a huge milestone in the space. The company has ambitious goals but was reportedly profitable long before its latest round of capital farming.
Until Zenefits came along, human resources was something you found at large companies with big budgets. This “all-in-one HR platform” gives small businesses the same ability to manage payroll and benefits as large employers. They raised $500 million in a Series C round in May, but I believe you can expect bigger things from this company real soon.
We can’t forget that FinTech is a global phenomenon. Lufax is a Chinese company that rose to a near $10 billion valuation with a $485 million funding round in April. This funding round was led by BlackPine, a private equity firm that specializes in Chinese investments. Lufax is a short name for Shanghai Lujiazui International Financial Asset Exchange Co. and is a peer-to-peer lending platform based in China.
Based in New Delhi, One97 Communications raised $585 million in four rounds, most of that this year. Their flagship brand is Paytm, a mobile commerce platform that is popular in India.
Personal loan innovator Avant is racking up big numbers. In fact, the Chicago-based company has raised $1.73 billion in 10 rounds since May 2013. That’s not bad for a company revolutionizing personal lending.
Another notable is Affirm, a consumer loans technology company led by PayPal co-founder Max Levchin, which raised $275 million in a Series B funding round in May this year.
What’s Next For FinTech Venture Funding?
Technically, Flipkart is an e-commerce company. Otherwise, I’d have included them in the list. Essentially, Flipkart is India’s Amazon, an online store that sells just about anything and everything. The impressive thing about Flipkart is they’ve had two—count ‘em, two—$700 million funding rounds.
As consumers of financial services grow more distrustful of traditional institutions, the ease of access to new technology is changing the way people relate to their money, and FinTech companies are leading the way.
FinTech venture rounds are on the rise. There were more than 1,000 venture deals in the first quarter of 2015 alone. It won’t be long before the financial services technology sector is No. 1 in venture capital funding and $1 billion rounds will be as commonplace as buying from Amazon.