Fintech Exit Activity Sees Robust Growth

The Financial Technology (fintech) sector has seen a lot of exit activity over the past few years. How does the number of exit events trend over time? Based on our fintech research platform, we have analyzed the data through 2017 and can conclude that fintech exit activity is seeing continued robust growth.

This observation was derived from two takeaways:

  • Fintech exit events are demonstrating strong annual growth
  • Fintech exit events are increasing at the quarterly level as well

We’ll illustrate these takeaways with two graphics that show the solid growth of fintech exit activity over time.

Fintech Exit Events Showing Strong Annual Growth

We’ll start off by examining the fintech exit events from 2011 to 2017. Exit events include both acquisitions and Initial Public Offerings (IPOs). The below graph shows the number of annual fintech exit events stacked by quarters.

Fintech Exits by Quarter - Stacked
Fintech Exits by Quarter – Stacked

This graph illustrates that fintech exit activity is demonstrating strong growth year over year. In fact, the Compound Annual Growth Rate (CAGR) in exit activity grew by 49% from 2012 to 2017. In addition, the number of exit events in 2017 is the highest ever and amounts to a 133% growth year over year.

Let’s now see if this trend holds at a quarterly level.

Fintech Exit Events Increasing At the Quarterly Level

Below is a graph of the number of fintech exit events by quarter.

Fintech Exits by Quarter - Cluster
Fintech Exits by Quarter – Cluster

The above graph shows that the overall fintech exit activity is on an upward trend at the quarterly level. Generally speaking, each quarter in 2017 saw a larger number of exits than in 2016. The number of exit events in Q4 2017 is 106% of that in Q4 2016. Q1 2017 was a particular outlier, seeing a huge 189% increase over Q1 2016. The only exception is Q2 2017 which fell slightly from Q2 2016.

From these two graphics we have now seen that fintech exit activity experienced vigorous growth at both the annual and quarterly levels.

Conclusion: Fintech Exit Activity Is Seeing Robust Growth

In summary, we have seen that the number of fintech exit events is showing strong growth year over year. Moreover, these exit events are increasing at the quarterly level as well.

We can conclude from these takeaways that fintech exit activity is seeing continued robust growth–which corresponds with our conclusion from the fintech funding blog post that the fintech sector is maturing as a whole. It’ll be interesting to see if this trend continues into 2018.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Financial Technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Interest in AI Startups Exploded in 2017

Artificial Intelligence (AI) technology startups seem to be in the news all the time. Is that hype, or are AI startups truly seeing major interest from investors? Using our research platform, we can conclude that interest in AI absolutely exploded in 2017.

We come to this conclusion from the following takeaways, each of which tracks a different metric for interest in AI startups:

  • AI funding grew exponentially in 2017
  • The number of AI deals is increasing
  • Investor interest in AI is growing

We’ll illustrate these takeaways with a series of graphs to show the extensive growth in AI.

AI Funding Grew Exponentially in 2017

Let’s start off by looking at AI funding trends over the past 6 years. Here is the annual amount of AI startup funding, stacked by quarters.

Q4 2017 AI Funding - Annual Funding

AI funding has been on an upward trend over these past few years, with a rapid explosion in 2017. Total funding in 2017 was over 3 times the size of 2016 funding. The Compound Annual Growth Rate (CAGR) in funding grew by a whopping 85% in the timeframe of interest (2012-2017).

This funding growth is substantial news on its own, but are there other metrics showing a growing interest in AI? Let’s see what the total number of deals looks like.

AI Deal Numbers Are Up Over 5 Years

The following graph shows us the annual number of AI startup funding deals, stacked by quarters.

Q4 2017 AI Funding - Annual Funding Count

Over the past five years, this graph shows an increased interest in AI via the number of deals in that startup ecosystem. Whereas the rapid growth in funding occurred in 2017, the rapid growth in deals occurred in 2014. The six-year CAGR on the number of deals stands at 23%. 2017 is also the highest year on record, beating the previous high in 2015 by around 2%.

So, we’ve seen that total funding and the number of deals are expanding, how about investor interest?

Investor Interest in AI is Growing

To gauge how investors are feeling, let’s look at the total number of AI investors who participated in each financing round. For example, if 5 investors participated in funding one company, and 4 investors participated in funding another, the total investor interest metric would be 9.

Q4 2017 AI Funding - Investor Participation

This graph clearly shows increased investor interest over the past few years. The six-year CAGR is 31%, and the 2017 total is 21% larger than in 2016 (the previous annual high-water mark).

Conclusion: Interest in AI is Exploding

In summary, we’ve seen significant growth in the total amount of AI funding. At the same time, the total number of AI funding deals has been steadily growing. Moreover, the investor interest in AI seems to be on a linear upward trend line. Taken together, we can say the AI sector is experiencing a rapid growth in interest over these past few years. It’ll be interesting to see if this trend continues into 2018, or if we travel into the “trough of disillusionment”.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Artificial Intelligence report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Real Estate Technology Startup Highlights  – Q4 2017

Here is our Q4 2017 summary report on the Real Estate Technology (proptech) startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete real estate technology (proptech) report and research platform, visit us at www.venturescanner.com or contact info@venturescanner.com

Insurance Technology Startup Highlights  – Q4 2017

Here is our Q4 2017 summary report on the Insurance Technology (insurtech) startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete insurtech research platform, visit us at www.venturescanner.com or contact info@venturescanner.com

Artificial Intelligence Startup Highlights  – Q4 2017

Here is our Q4 2017 summary report on the AI startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete AI research platform, visit us at http://www.venturescanner.com or contact us at info@venturescanner.com

Financial Technology Startup Highlights  – Q4 2017

Here is our Q4 2017 summary report on the financial technology startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete financial technology research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com

Insurance Technology Startup Market Highlights  – Q3 2017

Here is our Q3 2017 summary report on the Insurance Technology startup sector. The following report includes a startup landscape overview, graphical trends with insights, and recent funding and exit events.

We are currently tracking 1450 Insurance Technology companies in 14 categories across 61 countries, with a total of $19.5 Billion in funding. Click here to learn more about the full Insurance Technology market report.