Insight Report: Global Finance Sector

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New startup funding in the finance sector witnessed a decline in Q1 2019 while early-stage startups form the biggest chunk. Discover the global trends in our latest Insights Report here http://bit.ly/fi_sector
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  • 1. Oddup Insights A Report of the Global Finance Sector
  • 2. World’s leading startup insights provider
  • 3. Introduction ● This Insights Report will cover global and geographic trends in startup investment activity in the finance-sector over the past year. ● Along with recent trends, Oddup offers a sector-forecast for the rest of 2019. ● Finance startups are using emerging technology forces like cloud computing, data analytics, machine learning, and blockchain to upend old, inefficient business models.
  • 4. Quarterly Change in Valuation  The absolute value of BV for the sector increased only $96 million from Q1 2018 to Q1 2019, standing in early 2019 at around $452.5 billion.  The majority of this relatively small increase over the past year came in two consecutive quarters, Q3 2018 and Q4 2018.  The quarterly increase in the total BV of the sector in Q1 2019 shrunk to $14 million.
  • 5. Count of Startups by Quarter  Count of funded startups grew by 40 in Q2 2018.This was the sharpest increase across the past four quarters.  Q3 2018 added 20 more startups and 10 new startups joined the pool in Q4 2018 to take the total number of finance sector startups being tracked by Oddup to 7,787 at the end of 2018.  The trend of declining growth continues with only eight new funded startups from the sector, being added in the first quarter of 2019.
  • 6. New Investment in Each Quarter  Most active quarter of 2018 in regard to attracting new startup investment in the finance sector was Q2 2018.  It attracted almost $2.3 billion, which makes up for a third (nearly 34 percent) of the new investment in the sector during this time period.  The new investment in the sector is continually declining since Q2 2018. The most recent quarter (Q1 2019) has witnessed a sharp fall in new startup investment in the sector was limited to $117 million.
  • 7. Distribution of Startups by Investment Stage  The sector has gotten increasingly crowded with early-stage startups.  The data from Oddup shows 90 percent of funded startups globally are in the early stages of funding – Seed to Series B. Late stage investments are few and far between.  The cumulative valuation of the sector is almost $453 billion.
  • 8. Benchmark Valuation  Excluding Silicon Valley which dominates at $112 billion, Beijing has risen to be the top-valued startup region in the sector with a cumulative BV of $53.1 billion.  New York follows Beijing closely, housing a cohort of finance-sector startups worth a total of $51.5 billion, and is followed by Shanghai holding $44.4 billion worth of startups.  Mumbai and London lag relatively far behind with their respective cumulative BV of finance startups stacking up to only $3.5 billion and $3.1 billion, respectively.
  • 9. Geographic Distribution by Investment Stage  Early-stage startups dominate the cumulative valuation in the finance sector in four out of the top five startup-hubs. Shanghai is the only exception.  Seed-stage investments make up the majority of it, particularly in London, New York, and Mumbai with 83 percent in London, 82 percent in New York, and 77 percent in Mumbai.  In both Chinese startup-hubs, Shanghai and Beijing, the distribution of valuation is relatively more balanced between early-stage startups and late-stage ones.  The valuation of Seed-stage and Series-A startups add up to 46 percent in Shanghai and 73 percent in Beijing.
  • 10. Highest Valued Startups by Location  Uxin, the car e-commerce startup that enables consumers and dealers to buy and sell used cars, is the highest-valued startup in Beijing.  New York’s highest-valued finance-sector startup is Oscar, a technology- focused health insurance company.  Lufax, the startup with its own online financial assets marketplace, has emerged as the winner from Shanghai.  FreeCharge takes the throne in Mumbai and the fintech leader in London is Funding Circle, the first peer-to-peer lending marketplace in the UK that allows investors to lend money directly to small and medium-sized businesses.
  • 11. Companies Prime-for-Investment  Metro Bank from London takes the prime spot in the Seed stage category.  Silicon Valley’s early-stage startup, Filecoin, is the top prime-for- investment finance startup in the Series-A category.  All three of the late-stage prime-for-investment picks are from China.  Beijing-based Jiedaibao is the prime pick in Series-B, and Futu Securities of Shenzhen is the one in Series-C stage category.  Lastly, in Series-D, Beijing’s car e-commerce platform, Uxin, is the prime spot winner.
  • 12. Top 10 Companies to Watch Out for in 2019  The list is dominated by companies based in Hong Kong, including WeLab, 8 Securities, CompareAsiaGroup, and Oddup. Out of these four, Oddup is the only Series-A startup and rest are in the Series-B stage.  The other six startups that made to this list are all late-stage startups. The two Silicon Valley finance startups to watch out for are Stripe and Acorn.  London based Revolut and Funding Circle are the hottest startups in the sector from Europe.  The health insurance startup, Oscar, from New York and Flywire, the Boston-based payment solutions startup, complete the list.
  • 13. Contact Us  By providing an in-depth analysis of data and actionable insights on the startup ecosystem across sectors and regions, Oddup has become the leading global platform for due-diligence and research on startups, investments, ICOs, and cryptocurrencies.  Are you a venture capitalist firm or an accelerator looking for your next Unicorn startup?  Are you a management consultant looking for actionable insights to make critical strategic decisions?  Are you a part of a transaction or deal advisory team watching out for the next disruptive technology?  If your answers to any of the above three questions is a yes, then Oddup is the advantage-tool that you might want to add to your arsenal.  Want to discover more insights of the startup ecosystem by city, sector or quarter? Click here to subscribe to Oddup today! Or if you are a startup and want to gain exposure to active investors across the world, you can easily register your startup on Oddup here.  For more information, contact Oddup via email at enterprise@oddup.com
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