Fintech firms around the world raised $6.8 billion in funding in 2014, a three-fold increase on the previous 12 months as the sector enjoyed a banner year that also saw its first IPOs and a host of startups joining the billion dollar club.
In a look back on last year, Russian fintech VC firm Life.Sreda claims that 2014 saw the burgeoning financial technology sector become a serious venture industry, with money flowing to startups involved in online lending, cryptocurrencies, mobile wallets, analytics and other areas.
A major milestone was reached in December with Lending Club's successful IPO, which raised $870 million at a $5.4 billion valuation. Soon after SME lending outfit Ondeck followed suit, raising $200 million.
Meanwhile, the likes of Stripe and Square were joined in the billion dollar valuation club by a host of fintech players, including Transferwise, Kreditech, Credit Karma and Wonga. The leading sectors in terms of funds raised in 2014 were online lending, online acquiring and mobile wallets, PFM services, services for small and medium business, and mobile acquiring.
The US continues to dominate the market, accounting for $4 billion of the money invested in 2014, but Asia's fintech industry is also finally picking up. Chinese P2P player Renrendai raised $130 million during a year in which Asian firms took in a total of $0.8 billion.
Vladislav Solodkiy, managing partner, Life.Sreda VC, says: "A whole pleiad of fintech-dedicated funds, private and public, emerged last year, and one can hear recognized investors saying aloud what has definitely become a buzz phrase of the season: "Fintech is the next big thing!". We expect to see yet larger volume of investments, splashy IPOs and truly disruptive technologies in forthcoming 2015."