We rank top fintech investors by the number of fintech unicorns in their portfolios as well as the stage at which they first provided capital. Today, there are over 25 fintech unicorns across four different continents. Top names like Coinbase ($1.57B valuation), TransferWise ($1.6B), and Robinhood ($5.6B) have achieved global recognition. Using CB Insights data, we dug into which investors have backed the most billion-dollar fintech startups -- and which are poised to gain the most if their portfolio companies manage exits on par with their huge private market valuations. Fintech-focused VC firm Ribbit Capital takes the overall top spot as the most active investor in fintech unicorns, with 10 companies in its portfolio attaining at least $1B valuations.
The fintech sector is being shaped by shifting market conditions, new regulations, and changes in consumer demands and behaviors. For the past decade, fintech companies--technology firms that focus on financial products and services--have moved quickly, forcing incumbents to rethink their core business models and embrace digital innovations. But now, the fintech industry is itself maturing and entering a period of rapid change. Companies wondering how they will fit into this new era must first understand the forces that are pushing the changes. While the industry will undoubtedly continue to expand as its customer base grows and investor appetite remains unsated, changes are imminent.
Israel's tech sector is wrapping up a record year in 2021, with startups raising an astonishing $25 billion in funding from January through November, and 33 companies entering the unicorn club of private firms valued at over $1 billion, according to a report published Monday by Start-Up Nation Central (SNC). The value of capital investments represented a 136% increase in equity funding over 2020, itself a record year with over $10 billion capital raised. Funding in Israeli startups and companies was 71% more than the global average, and 78% more than in US companies, according to the report, which examined comparative data compiled by research firm Pitchbook. These record-setting numbers are a "reflection of global trends that are not necessarily Israel-specific, like the rise in investments in technologies, partially as a result of COVID-19 and the lessons of how much digital innovation and tech are key components of a strong and robust industry… but the numbers in Israel are stronger than the average," Start-Up Nation Central CEO Avi Hasson told The Times of Israel in an interview Monday. Indeed, global venture funding has reached all-time highs in 2021, with roughly $500 billion invested in companies worldwide so far this year, compared to over $330 billion in all of 2020. Larger funding rounds of $100 million or more dominated the global tech industry, with all funding stages seeing significant growth, according to Crunchbase data.
The proliferation of fintech services across Africa remains in full swing as investors remain bullish about the opportunities that abound in the sector. Today we behold another unicorn: African payments company Flutterwave announced that it has closed $170 million, valuing the company over $1 billion. New York-based private investment firm Avenir Growth Capital and U.S. hedge fund and investment firm Tiger Global led the Series C round. New and existing investors who participated include DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Partners, Salesforce Ventures, Tiger Management, Worldpay FIS and 9yards Capital. The Series C round comes a year after Flutterwave closed its $35 million Series B and $20 million Series A in 2018. In total, Flutterwave has raised $225 million and is one of the few African startups to have secured more than $200 million in funding.
Global fintech investment was essentially cut in half in 2016. With this stark shift, it might seem that fintech is taking a turn for the worse. But the reality is very different. In some markets, too much cash was chasing too few quality opportunities, driving valuations too high, and sending investors to the sidelines. But as the air is slowly released from this bubble, markets will correct, leading to lower valuations, driving more consolidations and acquisitions, and making room for more assets to move back in.