The analysis points to “broad tailwinds from the adoption of digital payments and an appetite among financial institutions for the latest technology” as the impetus for the investments. PitchBook also notes the 10 deals are way up compared to the same period in 2020, where just three such deals were announced.
According to information from PitchBook, the hot start to 2021 builds off momentum gained at the close of last year. As 2020 was wrapping up, VC-backed fintechs pulled in $41.7 billion in fresh capital. This represents the second-biggest annual haul of the last 10 years.
“Mega-rounds for consumer finance companies have followed the widespread adoption of digital payments amid a spike in ecommerce during the pandemic,” reads information from the data provider. “[One] week saw $300 million rounds raised by global payments operator Rapyd and the financial services unit of Indonesian ridehailing and food delivery company Grab.”
FROM TWITTER
Tamal Bandyopadhyay @TamalBandyo Jan 18
“'We believe India's top-tier pvt banks & @TheOfficialSBI are well-placed to deal with tech disruptions, given their dominant market positions & continued investments in technology,' says @SPGlobalRatings. Collaborations between traditional banks & fintech cos likely to increase"
B2B and enterprise entities are among the areas that new startups are targeting in order to attract attention amid an increasingly crowded consumer space, says Robert Le, a tech analyst at Pitchbook.
“Take London-based online payments platform provider Checkout.com, which processes transactions for companies like Grab, Klarna and Farfetch. Last week Checkout nearly tripled its valuation to $15 billion and became Europe's most valuable VC-backed startup after landing a $450 million investment,” reads the report. “And expense management software maker Divvy and banking software company Mambu also closed mega-deals earlier this month.”
The PitchBook report lines up with prognostications from J.P. Morgan Asset Management’s third annual Global Alternatives Outlook announced via Cision PR Newswire. The outlook provides a snapshot into the firm’s expectations for alternative assets like real estate, infrastructure, private equity, transportation, hedge funds and liquid alternatives.
To that end, one area J.P. Morgan Asset Management expects to throw its weight behind in the coming months is trendy big tech. “We'll be investing in global megatrends—sustainability, emerging market consumers, tech (including healthcare tech, such as telemedicine),” reads the outlook report. "We believe consumer and corporate technology adoption is at an inflection point, creating opportunities in cloud computing, software, cybersecurity, payments, semiconductors and biotech.”
The outlook also points to private equity deals that may not grab headlines quite like the ones noted by PitchBook as something to keep an eye on. “We see attractive opportunities among firms with revenues of USD $10 million to USD $100 million,” the report reads. “Despite increasingly competitive markets, these businesses can generally be purchased at lower valuation multiples with transaction structures less reliant on leverage.”
J.P. Morgan Asset Management is responsible for approximately $150 billion worth of alternative assets, according to the announcement.
