Fintech's record year
Massive venture rounds into fintech companies have ballooned this year, pushing up total dollars invested — in just the first three quarters of 2021 — to nearly double the amount in all of 2020, per new PitchBook data.
Why it matters: The maturing of fintech startups means a growing number of companies are able to raise huge later-stage funding rounds as investors look to lock-in their bets.
The big picture: A number of companies, from digital banks to cryptocurrency exchanges, have raised mega-rounds this year.
- Stripe raised $600 million, valuing it at $95 billion in March.
- FTX raised $900 million in July at a $18 billion valuation.
- Chime raised $750 million at a $25 billion valuation in August.
Be smart: Tech-driven companies taking on Wall Street and banks are no longer just upstarts that won’t make any serious dents in the sectors they're tackling. They’re now attracting hefty dollars, catching incumbents' attention as potential acquisition targets, building products that are viable alternatives to traditional ones, and getting regulator scrutiny.
By the numbers:
- Total dollars invested so far in 2021: $39.2 billion, up from $20.4 billion in all of 2020.
- Deals so far in 2021: 1,280, up from 1,078 in 2020.
- Average deal size in 2021: $36.3 million, versus $22 million in 2020 (media deal size grew to $7 million, up from $$4.2 million in 2020).
Between the lines: We're also seeing a number of exits in fintech, further underscoring the maturity of the sector.
- Cryptocurrency exchange Coinbase went public via a public listing in April.
- Stock trading app Robinhood held its IPO in August.
- Square acquired "buy now, pay later" giant Afterpay in August for $29 billion.
The bottom line: Expect even more eye-popping numbers for the full year.