Fintech funding rounds in 2020

Fintech funding, like all other sectors, suffered in 2020 because of the pandemic. The funding received by fintech companies decreased, although not by much. Still, there was some good news: the number of mega-rounds increased.

North American Companies Brought In Half The Money

Like the stock markets, funding started the year strong but then saw a slight dip in March that was quickly surpassed.

Still, the overall funding of the fintech sector decreased, according to the preliminary data for the State of Fintech Report by CB Insights.

According to the same source, the total amount of money raised by fintech companies last year was $41,914 million. With almost half of the money ($21,101 million), North America dominated, going towards firms from the US and Canada.

Asia followed, with $10,359 million, or nearly one-quarter of the total funds, while European fintech firms received only $8,076 million. Still, fintech was the sector that managed to attract the most funding in Europe this year.

Funding and deal-making declined 2% last year, the data gathered by CB Insights shows.

 

Less Money, More Mega-Rounds

There was some good news last year as well. According to CB Insights, the total amount of funds received decreased, the year-to-year number of mega-rounds increased. While in 2019, we saw 92 mega-rounds in fintech, last year, this number grew to 97. These represented more than half of all fintech funding (54%), with US$22,633 million raised.

Here are the five biggest deals closed during 2020:

 

Klarna

The Swedish fintech company managed to have not only one but two successful campaigns. In total, the buy-now-pay-later company raised over $850 million - $200 million in January and $650 million in September, making it the most successful fintech in 2020.

Klarna offers its users the possibility to purchase goods from numerous retail clients and either pay in full up to 30 days later or split the cost into 3 low-interest monthly installments. Klarna is now the 4th most valuable fintech company globally, with a valuation of $10.65 billion.

Last year, Klarna was once more one of the top fintech companies, raising no less than $460 million.

 

Robinhood

The popular trending app had a great 2020. Robinhood raised $660 million in its Series G round from several existing and new investors, including Sequoia, D1 Capital Partners, Ribbit Capital, DST Global, 9Yards Capital, and Andreessen Horowitz. The most notable investment, $200 million, came from D1 Capital Partner. Following this latest round, Robinhood's valuation grew to $11.7 billion.

According to Reuters calculations, with this latest round closed, Robinhood's total amount of capital secured reaches $2 billion.

 

Stripe

The digital payment company based in San Francisco had a great year, mostly because of the increase in online shopping after the beginning of the COVID pandemic.

In April 2020, Stripe announced that it had closed another funding round. The company raised $600 million, bringing the valuation to $36 billion. Amongst investors were Alphabet's GV, Andreessen Horowitz, General Catalyst, and Sequoia Capital.

Currently, Stripe is the most valuable private fintech company in the world.

Revolut

Revolut is no stranger to VC funds. The London-based fintech company raised $580 million in two rounds, $500 million in February and $80 in July. Revolut's previous funding round dates back to 2018, when it raised $250 million.

So far, Revolut has raised over $960 million in funding since the company was founded in 2015.

Chime

Chime, another San Francisco-based fintech, announced in 2020 that it had closed a Series F funding round after it had raised $485 million. Chime is a mobile app that helps users avoid bank fees and save money automatically.

Following the closing of the Series F, the company's valuation is now $14,5 billion, nearly 3 times higher than it was at the end of the previous round. In 2019, Chime secured $700 million across two mega-rounds (Series D and Series E), which brought its valuation at $5.8 billion.

 

Conclusion

Even though funding decreased by 2% last year, the number of fintech mega-funding rounds increased. Amongst 2020's biggest mega-rounds were Klarna's, which raised $850 million, followed by Robinhood's ($660 million) and Stripe's ($660).

North American companies were by far the most successful, raising $21,101 million, more than half of all the funds received in 2020.