Fintech investment in Asia: China leads Europe and the US 50% of global fintech investment is in China
According to the Fintech 1st Quarter Report 2016 published by KPMG and CB Insights, Asia overtook North America last year as a destination for fintech investment, with China accounting for half of total global fintech investment spend during this period.
Out of $2.6 billion invested in Asian fintech, China dominated with a share of $2.4 billion. It has achieved a remarkable 49% share of investment in start-ups. The reason why fintech investment has recovered in 2016 after seeming to stall last year is because China’s strength in fintech investment has such a large impact on the figures. European fintech by contrast is declining.
Overflowing fintech investment in China: but there are problems mounting up
According to the report, global fintech investment was $5.7 billion in Q1 2016. Of this figure, $4.9 billion reflects venture capital investment into fintech start-ups. The total number of investments was 218.
North America, which had previously been the fintech leader (in terms of investment into the region), recovered from a softer period in Q4 last year, with fintech businesses raising $1.8 billion of capital, up 80% on the previous quarter. However, the region has now yielded its top spot way to Asia, which is seeing an acceleration in investment.
China saw a significant leap in funding, with companies such P2P business, Lufax, and JD Finance raising in excess of $1 billion in quick succession. Last year, online insurance business, Zhong An Insurance, and Qufenqi.com, an electronics retailer which allows customers to pay in loan installments, successfully raised large amounts of capital. We expect them to become increasingly influential players this year.
On the flip side of this favorable picture, however, a number of hard-luck stories because of bankruptcy or fintech regulation imposed by the government have emerged, so Chinese fintech is not without mounting problems of its own.
Europe continues to struggle. Total investment in Europe was $348 million, broadly unchanged from the previous quarter. The UK, which is the leading country for fintech investment, saw a decline from $275 million to $102 million. The fall in oil prices and concerns over the UK’s secession from the EU have had a clear impact on investment.