US VC Investments in Fintech Startups. Q3 2019 Report

by Elena Obukhova

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US venture capital investments in Fintech startups are on the rise in 2019. Overall investment size has already overtaken 2018 levels and is expected to continue to grow 42% year-over-year. On the contrary, the number of deals has decreased. Angel/ seed and early stage investments decreased in size while follow-on rounds investment size increased. Thus, the later stage deals value was significantly larger than the earlier stages deals value in 2018.

Average and median pre-money valuation and deal size increased considerably as of September 2019 compared to the previous year. This was caused by the rise of later stage deals with respect to earlier stage deals. Median deal size used to be larger in 2006 but then fell to its minimum value in 2013. As for now, median deal size levels almost recovered to pre- recession levels and might reach nearly the same value in 2019. In 2014 there was an increase in later stage deals investment size and thus there was an increase in median and average deals value. In the later 2018 and 2019 Blockchain companies started seeking VC investments more compared to the previous periods when firms were going for an ICO.

In general, the market performed well as of the third quarter of 2019. Lemonade, Carta, Chime, Bill.com, Hippo, C2FO, Next Insurance were the US-based companies that reached values of over US$ 1 billion in 2019.