Asia leads first quarter global fintech investments

The Pulse of Fintech report showed that global fintech investment reached $5.7 billion during the three-month period, with $4.9 billion going to VC-backed companies. This represents a substantial rise from the previous quarter, when $3.1 billion was deployed overall and $1.9 billion went to VC-backed firms. The figures are also around double those for the same period last year.

Asia-based companies received the bulk of first quarter investment, with $2.6 billion committed. Of that, the overwhelming majority came from two deals in January: a $1.2 billion round for Ping An Insurance Group-controlled online finance platform Lufax; and a RMB6.65 billion ($1 billion) round for JD Finance, the financial subsidiary of online retailer JD.com.

The report counts all funding rounds for companies that have received VC or PE backing, even if a particular round did not include a VC fund; this is why the Lufax deal was included. AVCJ Research records $1.2 billion in VC and PE investment in Asia for the first quarter. After JD Finance, the biggest deal was a $160 million round for Hong Kong-based mobile lending and credit analytics platform WeLab led by Malaysian government-backed investor Khazanah Nasional.

While KPMG and CBI's data show the majority of capital in VC-backed fintech companies was invested in Asia, relatively few of the deals recorded happened in the region. The report shows 36 deals for VC-backed fintech companies in Asia, compared with 128 in North America for a total of $1.8 billion, and 218 deals worldwide.

Continued growth in fintech investment is expected over the coming quarters, particularly considering the $4.5 billion investment in Alibaba Group's Ant Financial concluded in April.

However, the report also highlights potential risks in the sector. Recent scandals include: peer-to-peer (P2P) online lending platform Ezubao in China, where nearly a million investors lost about RMB50 billion in a Ponzi scheme, leading to the arrest of the founder in February; and LendingClub, a US-based P2P lender whose founder and CEO recently stepped down amid allegations the firm had misstated the risk on loans it sold to investment banks.

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• Topics
• Greater China
• Technology
• Financials
• Venture
• Performance
• China
• KPMG
• Financial Services