Global investments in financial technology firms hit their highest quarterly record to date, clocking in $8.9 billion in Q3 2019, according to the Q3 2019 Global Fintech Report from CB Insights. The year-to-date count of $24.6 billion already surpasses 2017’s annual total of $18.8 billion.
Early-stage transactions fell to an 11-quarter low and funding hit a seven-quarter low, contributing to the lower overall funding by aggregate annual data. CB Insights expects that this year’s deal total won’t top 2018, which saw nearly 2,000 deals and $40.6 billion in investments.
Asian markets helped propel this year’s growth, with China and India head-to-head for the top spot in the region. India raked in 33 deals totaling $674 million in total funding, while China had 55 deals totaling $661 million.
Southeast Asia reached new highs as well, setting an annual record with $701 million raised across 87 deals in the third quarter. The United States, however, experienced a slight pull-back in early-stage deals.
Many institutional investors are pouring money into private equity deals as a whole, since their returns are amongst the highest in many portfolios. The California Public Employees’ Retirement System is struggling to keep up with its private equity pacing plan, and must to increase its commitments on a steady basis to meet its 8% target allocation to the asset class, according to its consultant Meketa.
Private equity firms have been under fire from politicians lately for its “predatory behaviors impacting investors.” Massachusetts Sen. Elizabeth Warren introduced legislation that would publicize their fees and returns, and likened them to vampires “bleeding the company [they acquire] dry and walking away enriched even as the company succumbs…Costing thousands of people their jobs, putting valuable companies out of business, and hurting communities across the country.”
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Tags: CB Insights, deal flow, Fintech, Private Equity, Q3 2019, record, Venture Capital