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CBInsights & KPMG: Trends in Fintech Q1-2016

CBInsights hosted a webinar in which they presented an overview of the current fintech space together with KPMG. During the 45 minutes presentation they touched on a variety of topics and provided the latest Q2 2016 investment patterns. A short recap of the webinar will be given here with more extensive data to be found in the latest CBInsights report. Daniel O’Keefe from KPMG started off with new insights in the robo advisory scene. An active area fintech according to him which especially in the US is gaining momentum. More and more startups launch and entry barriers are low. Investments have diversified with a sharp increase in early stage investments, indicating easier access to funding for new players. Cooperation between startups and new platforms and established corporations is increasing, allow fintech firms to get more volume and proof their new solutions. This momentum for robo-advisory, or broader wealth management technologies, is not the same around the world. Regulations outside the US, most notably in Europe, are more strict which brings challenges to local firms and US firms wishing to expand. Nevertheless, Daniel O’Keefe expects big growth in the coming twelve months with an increase in usage of wealth tech by corporates. In the first quarter of 2016, fintech firms worldwide raised $5.7 billion, with the majority ($4.9 billion) being venture capital backed investments. This is a large increase from the $1.9 billion raised in Q4 2015. The continued unbundling of banks leads to an increase in collaboration between startups and corporates while corporate involvement in investment sits steady at around 20%. Major hot area for VC backed investments is insurance tech noting a 600% increase since 2011. Similar to the wealth management tech sector, the trend of more diversified and focus on early stage investments is visible here as well with 53% being seed funding and another 13% being Series A. When looking from a geographic point of view, investment activity in North America focus the general trend: an increase of total funds as compared to Q4 2015, a decrease in late stage companies and an increase of corporate involvement. In Europe, both general investments and Series A investments rise to 4-quarter highs. Asia as well, follows the global upward trend while Series A investments over there have sharply declined, giving room to Seed and Series B investments. For more detailed information, take a look at the new CBInsight report on the Trends of Fintech Q1.]]>

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