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Emerging Tech Research: Fintech

Q1 2021

Emerging Tech Research: Fintech

June 10, 2021

Emerging Tech Research: Fintech
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Favorable tailwinds push fintech activity to near record highs

The ongoing shift of financial services toward digitization and online channels accelerated over the past year, benefiting fintech companies that predominantly operate within digital ecosystems. This led to a near record high in Q1, as VC-backed fintech companies globally raised $21 billion across 909 deals. 

Our Q1 2021 Emerging Tech Research: Fintech report covers VC activity, highlighting key deals and exits. The report also dives into industry opportunities—covering developments in controller automation, credit cards and earned wage access models.

Key takeaways
 
  • The median pre-money valuation for late-stage fintech companies soared to a record $396 million in Q1—marking a 230.5% jump from full-year 2020’s figure.
 
  • Autonomous finance will likely see early adoption within enterprise applications, especially with automating accounts payable and receivable processes within the controller function.
 
  • While monumental customer acquisition challenges exist when competing head-on with incumbent issuers, we believe that credit cards will be the next area of disruption from fintech companies. 
 
  • Propelled by the strong cryptocurrency market, digital assets companies raised a record $2 billion during the quarter.