US fintech funding boomed at the start of 2018 — but early-stage funding is drying up in Europe

Original Source    2018-04-23 18:04

oscar health foundersOscar CEO and co-founder Mario Schlosser, co-founders Kevin Nazemi and Joshua Kushner. The company had the largest US funding round in the period. Oscar

LONDON — Global fintech funding hit a new quarterly record at the start of 2018, according to venture capital industry tracker CB Insights.

VC-backed fintech companies raised $5.4 billion across 323 deals globally in the first quarter, according to CB Insight’s latest fintech report, released on Monday.

The figures were supported by a big uptick in deal-making activity in the US. US fintechs raised $2.1 billion across 147 deals. Notable investments include a $165 million funding round for insurance startup Oscar in March and a $110 million capital injection for San Francisco’s Collective Health in February.CB Insights While deal activity spiked in the US and Asia, it fell to a 5-quarter low in Europe with just 63 first quarter deals.

The slump was largely down to a decline in early-stage funding deals and came despite several $100 million-plus funding rounds for European challenger banks N26 and Atom. European fintechs raised $933 million in the first quarter.

Funding for startups dealing with financial regulation, wealth management, and challenger banks rose, while funding for alternative lenders dropped. CB Insights said European regulation such as MIFID II, PSD2, and the upcoming GDPR were boosting financial regulation startups.

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