Deep Dive: The CB Insights State Of Fintech Q2’20 Report*
With the exceptions of digital learning and biotech, no sector has so obviously benefitted from the lockdowns in the wake of the pandemic as fintech. The necessity of remaining at home has provided a tailwind for a sector entrenched in the transition from the offline economy to the online economy. Now that e-commerce penetration of US retail sales is projected to reach 27%, digital payments stand to become even more important (see graph).
Nevertheless, the number of VC-backed deals for fintech companies continued to decline in Q2’20, falling to 397, down 55 deals QoQ, and 160 deals from the sector’s peak of 557 in Q1’18. However, the total dollar volume brought in by those rounds grew 17% QoQ from $7.95B to $9.29B (see graph). Discounting Q2’18, which saw Ant Financial’s $14B funding round, the latest figures are still down from the peak funding of $11.7B in Q3’18.
Expectedly, the number of mega-rounds did well, reaching a new high of 28 in Q2’20 and beating out Q2’19’s previous record of 26. This was undoubtedly due to top companies seeking funding to tide them over during the economic uncertainty. Though only one new unicorn was minted in Q2’20