VC funds, bank and tech provider venture funds pumped in over a billion dollars in FinTech-focused funds in 2013 alone.
The announcements and the size of the funds underscore the attention FinTech is getting from investors and the confidence of expected returns.
The variety of players (i.e. Banks, Tech Providers, VCs) launching these funds is proof that no other sector offers the permutations and combinations of start / fund / build / buy / partner / acquire options, and the players involved, for example:
- B2B startup (e.g. data analytics) selling to banks, funded by VC
- B2B startup goes B2C (e.g. use big data for credit decisions, then use it to offer micro-credit), competes with bank/FSI, funded by VC
- B2C startup (bank competitor, e.g. lending), goes B2C, but also offers white-labeled platform (B2B); acquired by tech provider
- B2C startup (bank competitor, e.g. mobile trading), acquired by bank, which offers it as white-labeled platform sold to other banks on a SaaS model
We see quite a few of these models in play already in a comparatively smaller but promising FinTech scene here in Germany / D-A-CH.
Not too far we can also see bigger startups acquiring smaller or geographic rivals to accelerate growth, or merging with partner(s) in a different but complementary parts of the banking value chain- while compliance, cost pressures and scandals keep the big banks busy.
Here is the 2013 FinTech Fund “calendar” so far (with the disclaimer: these are based on publicly available information and we are not responsible for the completeness or correctness of the information in this post or on the links below):
Sep. 2013 New € 100 million VC FinTech Fund to be launched in Barcelona
Sep. 2013 Morgenthaler partners form new $175M fund to invest in cloud, fintech, & health IT
Sep. 2013 Former VeriFone chief Bergeron and GTCR create $500 million fintech acquisition fund
May 2013 Bloomberg LP Gets In Venture Game With $75M Fund
Jan. 2013 BBVA sets up $100 million fintech venture fund
Jan. 2013 Ribbit Capital Closes $100M Venture Capital Fund; Launches Inaugural Fund with Four Initial Investments
The murmurs could be heard in 2012 already.
Oct. 2012 Sberbank sets up $100 mn FinTech Startup Fund
Feb. 2012 Hapoalim sets up NIS 80m (~$21M) financial tech fund