Consumer Lending Category Leads Financial Technology Funding

We’ve previously highlighted that financial technology funding is on pace to have a record year in 2018. When we take a closer look at the categories that make up fintech, we notice that the Consumer Lending category leads in both Q3 and overall funding.

We’ll highlight this conclusion with some graphics and discussions below.

The Consumer Lending Category Leads Financial Technology In Q3 Funding

To start off, let’s review the amount of funding raised this quarter by each category within financial technology.

Financial Technology Latest Quarter Category Funding
Financial Technology Latest Quarter Category Funding

The above graphic highlights that the Consumer Lending category leads the sector in Q3 funding with $3.7B. Its funding is 2.5 times the funding of the next category, Business Lending at $1.5B.

Consumer Lending companies offer new ways for consumers to obtain personal loans and have credit risks assessed. They include peer-to-peer lending, micro-financing, big data analytics, and consumer credit scoring services. Some example companies are SoFi, CommonBond, Avant, and Lufax.

Let’s now investigate how the fintech categories’ funding compare with each other historically.

The Consumer Lending Category Also Leads in All-Time Funding

The graph below shows the all-time funding for different financial technology categories. The Q3 funding and growth rates of these categories are also highlighted.

Financial Technology Total Category Funding
Financial Technology Total Category Funding

As the bar graph indicates, the Consumer Lending category also leads financial technology in total funding at $33B. Payments Backend and Consumer Payments follow in the second and third place spots with $28B and $27B in total funding, respectively.

In summary, the Consumer Lending category is leading the fintech sector in both Q3 funding and all-time funding. Let’s see how the the rest of 2018 shapes up for financial technology!

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.

Financial Technology Sector Overview – Q3 2018

The financial technology sector has reached record highs in its funding and exit activity. This blog post examines the different components of the fintech sector and how they make up this startup ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.

Consumer Lending Is the Largest Financial Technology Category

Let’s start off by looking at the Sector Map. We have classified 2,545 financial technology startups into 16 categories that have raised $118 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Financial Technology Sector Map
Financial Technology Sector Map

We see that Consumer Lending is the largest category with 336 companies. These companies offer new ways for consumers to obtain personal loans and have their credit risks assessed. They include peer-to-peer lending, micro-financing, big data analytics, and consumer credit scoring services. Some example companies are SoFi, CommonBond, Avant, and Lufax.

Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.

The Established Quadrant Has the Most Financial Technology Categories

Our Innovation Quadrant divides the financial technology categories into four different quadrants.

Financial Technology Innovation Quadrant
Financial Technology Innovation Quadrant

We see that the Established quadrant has the most financial technology categories with 7. These categories have reached maturity with less-than-average funding. The Pioneers quadrant has 6 categories that are in the earlier stages of funding and maturity. The Disruptors quadrant contains 2 categories: Consumer Lending and Consumer Payments. These categories have acquired significant financing at a young age. The Heavyweights quadrant has Payments Backend as its one category. This category has reached maturity with significant financing.

We’ve analyzed the financial technology categories and their relative stages of innovation. Let’s now look at how they stack up against one another in terms of their total funding versus company counts.

Consumer Lending Startups Have the Most Funding

The graph below shows the total amount of venture funding and company count in each category.

Financial Technology Total Category Funding
Financial Technology Total Category Funding

As the above graphic implies, in addition to leading in total companies, the Consumer Lending category also leads in total funding with $33 billion. Payments Backend and Consumer Payments follow in close second and third places with $28B and $27B, respectively.

Conclusion: The Consumer Lending Category Leads Financial Technology

The analysis above highlights that Consumer Lending leads the sector in both total companies and total funding. We’ll see if any of the other categories catch up during the rest of 2018.

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.

Financial Technology Startup Highlights  – Q3 2018

Here is our Q3 2018 summary report on the financial technology startup sector. The following report includes a sector overview and recent activity.

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

Mid-Year Financial Technology Exits Analysis

We’ve previously determined that exits within the fintech sector grew exponentially over the past few years. Now armed with the data through June 2018, we’re conducting a mid-year status check on how this year is shaping up.

After conducting a deeper examination on our fintech research platform, we see that exit activity thus far in 2018 is trending slightly lower than in 2017.

2018 Mid-Year Fintech Exit Activity Lower Than 2017 But Higher Than 2016

Let’s take a closer look at the number of fintech exit events by year.

Financial Technology Exits by Quarter
Financial Technology Exits by Quarter

The above graphic shows 38 exits in the first half of 2018. For the past three years, Q3 and Q4 accounted for 50% of total exit events on average. If that trend holds, 2018 will have around 76 exit events. That would be slightly lower than the number of exits in 2017 but higher than that in 2016.

Conclusion

In summary, we observe that the fintech sector’s exit activity in 2018 is trending lower than 2017 but higher than 2016. We’ll see if the second half of the year changes this trend!

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.

Financial Technology Startup Highlights  – Q2 2018

Here is our Q2 2018 summary report on the financial technology startup sector. The following report includes a sector overview and recent activity.

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

Payments-Related Fintech Categories Seeing Large Growth in Q2

Last quarter we determined that fintech funding is maturing. This quarter we are taking a closer look on our fintech research platform to examine funding by category. From this analysis, we conclude that payments-related categories are outperforming all other categories by a wide margin.

This conclusion comes from two important takeaways:

  • Consumer Payments leads the sector in Q2 funding
  • Consumer Payments also has the highest funding growth percentage

We’ll explain these takeaways with some graphics and discussions below.

Consumer Payments Leads Fintech in Q2 Funding

To start off, let’s look at fintech category funding in Q2.

Financial Technology Current Quarter Category Funding
Financial Technology Current Quarter Category Funding

The above graphic shows that Consumer Payments leads the sector in Q2 funding with $15B, with Payments Backend right behind at $14.7B. It’s noteworthy that these payments categories are roughly 13 times larger than the next category, Business Lending.

So we’ve witnessed how different fintech categories stack up in their Q2 funding. But how do these categories’ funding growth rates compare with one another? Let’s investigate that in the next section.

Consumer Payments Funding Grew the Fastest in Q2

The graph below shows the all-time funding in fintech categories with the quarterly funding and growth rates highlighted.

Financial Technology Total Category Funding
Financial Technology Total Category Funding

The line graph in the above graphic indicates that Consumer Payments and Payments Backend had the highest growth rates and more than doubled their funding in Q2.

Although the bar graph demonstrates that Consumer Lending leads in all-time funding with $29B, the two payments-related categories, Consumer Payments and Payments Backend, aren’t far behind with $28B and $27B, respectively.

Conclusion: Payments-Related Fintech Categories Saw Massive Growth Last Quarter

In summary, we have analyzed the fintech funding amounts in different fintech categories. We’ve discovered that Consumer Payments leads in Q2 funding and had the highest growth percentage, with Payments Backend in a close second place for both metrics. It’ll be interesting to see if any other fintech categories will see similarly large growth in the rest of 2018.

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.

Financial Technology Sector Overview – Q1 2018

The financial technology sector has seen a lot of momentum in funding and exits in recent years. As we previously noted, fintech funding has shifted to later stages and its exit events have skyrocketed.

We will now take a closer look at the different components of financial technology and how they make up this startup ecosystem. We have classified the companies into 16 categories. This blog post will illustrate what these categories are and which categories have the most companies. We will also look at how these categories compare with one another in terms of their funding and maturity.

Consumer Lending Is the Largest Financial Technology Category

Let’s start off by looking at the Sector Map for the financial technology sector. As of March 2018, we have classified 2407 financial technology startups into 16 categories that have raised $90 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Financial Technology Sector Map
Financial Technology Sector Map

We see that Consumer Lending is the largest category with 321 companies. These companies offer new ways for consumers to obtain personal loans and have their credit risks assessed. They include peer-to-peer lending, micro-financing, big data analytics, and consumer credit scoring services. Some example companies are SoFi, CommonBond, Avant, and Lufax.

We have seen what the different categories making up this sector are and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Payments Backend Is the Heavyweight Category in Financial Technology

Our Innovation Quadrant divides the financial technology categories into four different quadrants.

Financial Technology Innovation Quadrant
Financial Technology Innovation Quadrant

We see that the Pioneers quadrant has the most financial technology categories with 10. The Pioneer categories are in the earlier stages of funding and maturity. The Disruptors quadrant contains three categories: Consumer Lending, Business Lending, and Consumer Payments. These three categories have acquired significant financings at a young age. The Established quadrant includes Banking Infrastructure and Transaction Security. These two categories have reached maturity with less financing. The Heavyweights quadrant contains the Payments Backend category. This category has reached maturity with significant financing.

It’s interesting to see that both lending categories, Consumer Lending and Business Lending, are Disruptors. This indicates that lending startups have transformed the fintech industry with their venture capital backing at early ages. In addition, the Heavyweight category, Payments Backend, is the one that leads fintech in exit activity as we saw in our exits blog post. This makes sense since mature and well-funded companies are more likely to be acquired or go public than those that aren’t.

We’ve now seen the financial technology categories and their relative stages of innovation. How do these categories stack up against one another? Let’s look at the Total Funding and Company Count Graph.

Consumer Lending Startups Have the Most Funding and Companies

The graph below shows the total amount of venture funding and company count in each category.

Financial Technology Funding and Company Count
Financial Technology Funding and Company Count

As noted earlier, the Consumer Lending category leads financial technology with 321 companies. In addition, the above graphic highlights that Consumer Lending also leads in funding with over $28 billion. Some of the best-funded companies in this category are JD Finance ($3.01B), SoFi ($2.08B), and Avant ($1.78B).

It’s noteworthy that the funding in Consumer Lending is 81% higher than the funding in the next category, Business Lending. Business Lending companies offer new ways for businesses to raise debt financing and have their credit risks assessed. Some example companies include Bond Street, LendInvest, BlueVine, and Funding Circle.

Conclusion: The Consumer Lending Category Leads the Fintech Sector

From the above analysis, we can see the Consumer Lending category leads financial technology in funding and company count. On the other hand, the Payments Backend category stands out as the Heavyweight category in our Innovation Quadrant. It has reached maturity with significant average funding per company versus other categories. It’ll be interesting to see how the financial technology landscape will change and develop throughout the rest of 2018.

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.