Fintech dominates global and regional VC investment surge

Fintech took the lion’s share of global VC investments in 2021, according to CB Insights.

Startups saw record levels of VC investments, according to reports by CB Insights, a leading technology insights firm, which reported global investments of USD 621 billion last year.

The report highlighted the rise of global fintech investment in geographies including Latin America, Africa, and North America in particular. The emergence of consumer-facing lending, crypto exchanges, neo banks and trading apps was noted as investors sought to get onboard the new wave of finance services.

Global fintech investment accounted for USD 131.5 billion across 4,969 deals, compared to USD 49 billion across 3,491 deals in 2020.

According to the report, 14 fintech deals were announced every day, worth USD 387,777,777 every 24 hours in Q4 of 2021.

Region by region

The US led fintech funding in Q4 of 2021, followed by Asia and Europe, recording values of USD 18.2 billion, USD 8.2 billion and USD 5.6 billion, respectively. Latin America came in fourth, recording USD 4.2 billion in Q3 and USD 1.9 billion in Q4.

Deal size

The global average deal size also reached new levels, with average startup rounds hitting USD 32 million, almost double that of 2020 (USD 18 million). The median deal size was USD 5 million, a 20% increase on 2020.

According to the report, this implies that there were a large number of significant investments made in late-stage startups made last year.

However, early-stage startups also saw a rise in funding, with early-stage deals accounting for 64% of all deals.

Fintech: Africa and MENA

According to a recent article by KPMG, 2021 was also a record year for Africa.

The data shows that over USD 1.6 billion was invested across 153 deals, double that of 2020 and representing a 50% increase in deal volume.

According to the report, the key fintech investment markets included Nigeria, Kenya, South Africa and Egypt. In the MENA region, early indications are that 2022 will present yet more opportunities as overall startup investments in Q1 (including fintech) hit 900 million USD. Investors from Saudi Arabia, the UAE and Egypt led the way in terms of total investments.

2022 Q1 Fintech highlights from the MENA region included Naspers’ investment in Lucky, Mashreq investing in Cashew, and Rain’s raising of USD 110 million.