State of Fintech

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2021

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State of Fintech

Key takeaways

Investments are up, crypto and blockchain are on the rise, and corporate venture capitalists (VCs) want in on the growth. Three key trends from the report:

Record-setting VC activity

Venture capital investment in fintech companies reached a new high in 2021, surpassing the previous record set in 2018.

Rise of Fintech 3.0

Cryptocurrency and blockchain represent the fastest-growing fintech sector at both early and late stage as investors bet that new technologies will usher in a future decentralized financial system.

Fintech excites Corporate VCs

The number of CVC fintech deals is on track to increase 64% over 2020 with an aggregate deal size projected to increase 158%.

Report highlights

The Covid-19 pandemic has accelerated the digitalization of finance forward with a record number of new fintech deals across the globe. New areas of innovation have continued to emerge across fintech sectors including payment facilitation. Late-stage deals dominated the venture landscape, minting a record number of “dragons”.

A record year for fintech venture deals

The consumer and business shift toward digital brought about by the COVID-19 pandemic has buoyed interest in fintech startups. In 2021, fintech companies were 14% of all VC deals but accounted for 18% of investment.

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Global investment sets new records for deals, dollars and valuations

European and American fintech companies raised a combined $70.0 billion in 2021, up from $29.3 billion in 2020.

Emerging opportunities in Fintech

An increase in digital users has broadened the market, leading to a surge in fintech company formations. Since Q2 2020, first financings for fintech startups have jumped 53.6% reversing the pre-pandemic downtrend.

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More companies across verticals integrating payment facilitation models

With new payment facilitation solutions continuing to remove hurdles for merchants looking to process digital payments, revenue for PayFacs has accelerated since the start of the pandemic with no signs of slowing down.

Fintech dominates the IPO market this year with 12 companies going public

With positive investor sentiment for high-growth fintech assets combined with a willingness to pay a premium, fintech companies accounted for 5 of the 10 largest US VC-backed tech IPOs in 2021.

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Written and researched by SVB experts

Our deep relationships with top entrepreneurs and investors inform our insights and give us a vantage point unlike any other bank.

Dan Allred

Senior Market Manager

Ilana Fass

Director

Ilana Fass is a director on SVB’s Fintech team, where she partners closely with entrepreneurs, investors and influencers across the national fintech ecosystem.