DealmakingM&A / FundingValuations

CB Insights releases Q3 2021 Fintech report

CB Insights released its Q3 2021 fintech report today, with highlights including $31.3 billion in funding representing a 147% YoY increase, 43 new unicorns and a new high for global fintech exits with 664 to date this year.

Despite the $31.1 billion in funding falling 16% compared to last year’s all-time record, it still marks the second-highest quarter of global funding ever.

This includes $14.6 billion in US quarterly funding, a 121% YoY growth over last year and 47% of all global funding despite only accounting for 39% of global deals.

The report also states 43 new fintech unicorns were born in the third quarter of 2021, which is no surprise considering there were 94 rounds over $100 million in the quarter. This is the third consecutive quarter that these ‘mega-rounds’ have driven the majority of global fintech funding, making up 64% of quarterly funding and spurring new unicorns to double from 103 to 206 in Q3’21.

While there has been steady movement in early-stage funding, accounting for 63% of total deal activity, growth in mid-stage and late-stage deals has been incredible. Mid-stage median valuations have risen 144% to $478 million in 2021 YTD, with early-stage growing 78% and late-stage valuations growing 62% in the same time.

That 62% late-stage figure doesn’t really explain the insane growth and movement happening in those deals and M&A exits, however. Late-stage median deal size has more than doubled YoY to $90 million, and the amount of M&A exits has hit an all-time high of 664 this quarter.

That outpaces all of 2020 by 23%, driven by M&A activity across digital lending and banking jumping 110% and 121% respectively since 2020.

Global deals have skyrocketed, according to the report, with year-to-date funding in 2021 almost doubling 2020 totals ($48.4B) to hit $94.7B.

Asia headlines the global side of the report, with deals in the region reaching a new high for the fifth consecutive quarter of growth.

The 307 deals in Asia accounted for $5.9 billion in funding, beating out:

  • Europe’s $5.5 billion across 239 deals
  • Latin America’s $2.6 billion across 73 deals
  • Canada’s $900 million across 33 deals
  • All other regions’ (Africa + Oceania) $1.5 billion across 76 deals

That adds up to $16.4 billion across 728 deals worldwide, compared to the $14.6 billion across 457 deals raised in the US during Q3’21. That breaks down to 39% of all global deal share hailing from the US, followed by 26% in Asia, 20% in Europe, 6% in LatAm, 3% in Canada and 6% in all other regions.

Asia’s mega-rounds also grew for the third consecutive year, reaching 18 and surpassing Europe’s 15 for the first time since the first quarter of 2020.

This is significant when you consider that while mega rounds made up 8% of total deals in Q3’21, they accounted for 64% of total funding. The largest of those equity deals included FTX‘s $900 million Series B, Revolut‘s $800 million Series E, Chime‘s $750 million Series G.

Additional equity deals in the top 10 of Q3’21 include Kavak, Varo Bank, Carta, DriveWealth, iCapital Network, Genesis Digital Assets and Opay.

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