Australian fintechs scored $US600 million in new deals in 2016 despite investment plummeting worldwide: Report – StartupSmart
Investment in Australia’s fintech sector soared to more than $US600 million ($780 million) in 2016 up from just over $US50 million four years prior, a KPMG report reveals.
According to KPMG International’s The Pulse of Fintech report, in 2015 $US185 million injected across 23 fintech investments in Australia and a year later, $US656 million was injected into 25 deals.
Back in 2012, fintech investment in Australia totalled $US51 million, according to KPMG.
Meanwhile, investment in fintech slid by nearly 50% around the world between 2015 and 2016. In 2015, total global investment in fintech ventures totalled $US46.7 million, but that figure dropped to $US24.7 billion in 2016.
“Australia’s performance was driven by some large deals, and specifically M&A [mergers and acquisitions] and private equity transactions,” KMPG’s fintech practice global co-lead Ian Pollari said in a statement.
“While mega deals result in peaks and troughs in overall figures, the trend is clear and demonstrates increasing interest and investment activity in fintech.”
According to rising fintech star Prospa, which recently closed a $25 million investment round led by AirTree Ventures, increased interest in Australian fintech companies comes with rising confidence among consumers to engage in new markets like online lending platforms.
“It’s a great story for Australian VCs, and really just cements the general market awareness of how Australia can build great tech companies,” Prospa founder and chief Beau Bertoli told SmartCompany about the company’s latest capital raise.
“We’ve seen a massive shift in the past couple of years for acceptance of lending. When we started there wasn’t a lot of awareness of options outside of the banks, we’ve seen great feedback from customers.”
Victor Jiang, founder of Australian venture capital fund Sapien Ventures, which targets Chinese investors, says opening up the door for overseas investors to participate in the local startup sector is also helping to strengthen the fintech market Down Under.
“Recent changes in policies such as the Significant Investor Visa (SIV) program has strongly catalysed foreign inbound capital into the much needed early-stage venture capital and entrepreneurial ecosystem,” says Jiang.
“There are more fintech investors coming onto the scene all the time. With US policy uncertainties and Brexit, the time is ripe for Australia to become a leading regional hub of fintech investment and excellence.”
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