The news: the US leading the number of transactions and financing in 2021, while investments in Asia and Latin America reached record highs, according to CB Insights’ State Of Fintech 2021 report.
Fintech funding by region: Funding jumped in the United States, Asia, Europe and Latin America as investment increased in a booming sector, driven by the general interest of financial services companies and technology companies.
- US: Fintech funding soars 171% to $62.9 billion for the year as investors shrugged off pandemic-related market uncertainty. The number of transactions increased by 42% to 1,827.
- Asia: Record fintech transaction activity took place during Q421, with 352 offers—its best quarter in nearly four years.
- Europe: While the number of European transactions rebounded in the fourth quarter, funding refused for a second consecutive quarter at $5.6 billion. Overall, fintech funding on the continent soared in 2021, more than doubling to $26.3 billion.
- Latin America: Fintech funding has more than tripled in 2021 to reach $12.9 billion, driven by mega-towers, which represented nearly 70% of financing in 2021per trading room.
What’s new in 2022? We to predict Fintech funding will surpass 2021 levels and surpass the $150 billion mark globally, as investor confidence continues to strengthen after a period of caution during the pandemic.
- Latin America: Fintech funding here will reach a new high in 2022, eclipsing the $13 billion mark. Companies will seek to take advantage of the enormous pent up request for fintech services in the region, where 56% of consumers still have traditional bank accounts, according to World Bank data. Fintech’s growing efforts to democratize access to financial services attract new customers and attract more funding.
- WE: It will likely continue to dominate the fintech landscape, driven by a multitude of companies exploiting an unbridled demand for services and rapidly evolving technology. Crypto players, wealth managers, insurtechs and regtechs have all won big rounds, highlighting the country’s range of fintech expertise. As always, the biggest funding volumes go to companies with the biggest names, many of which are based in the United States. Just last week, a New York-based crypto tech firm NYDIG earned a staggering $1 billion, reaching a market value of $7 billion.
- UK: Funding growth among British fintechs will likely continue to contribute an outsized share to the inflation of global investmentboosted by a supportive regulatory landscape and a recovery in business confidence following the pandemic and Brexit crisis.
- Emerging Markets: While many of 2021 biggest fundraisers were concentrated in the United States and Europe, emerging market companies have also attracted significant funding. south korean Viva Republica notched $450 millionand CRED in india high over $400 million over several climbs. We expect this trend to continue in 2022 as businesses seek to better serve underserved customers in regions with substantial growth potential.