2016 became the first year when the US lost its dominant global leadership in fintech – lost to Asia! Only the previous year, Asian fintech was twice smaller than the US, and just last year, it easily surpassed the US, accounting for 47 per cent of the global volume, as you can find in the new issue of Money Of The Future 2016/2017 fintech report.
Why did it happen, and how Asia grew so fast? The answer is simple: This growth is driven by fintech “megadeals” that happened in China. Many large local players — internet and IT giants, traditional banks and insurance companies, funds and financial holdings — realised just in time that there is an enormous potential in the fintech market in China. From the beginning, these companies played really big, providing massive investments to several companies in the market, including: Ant Financial (AliPay mobilises for wordwide expansion), JD Financial, Lufax, and others.
While we don’t see the real increase in terms of number of deals (257 deals last year against 221 in 2015), the cheque sizes are getting bigger and bigger, increasing the volume of the whole market (+60 per cent Y0Y).
While China dominates Asian fintech market by amount of funding, India is number one, in terms of the number of fintech deals (Paytm is the leader). From a product and technology perspective, different new fintech verticals started to grow, reducing the focus on lending and payment areas.
China, India, and Singapore are the top three countries, in which more than 70 per cent of all fintech investments went in 2016 (by numbers of deals). Pakistan, Laos, Myanmar, Bangladesh, Vietnam and Cambodia together have 7 per cent of the total fintech funded companies in 2016, however the potential and demand for fintech of these countries is much higher.
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