​Insurance and Chinese fintechs dominate 2015: KPMG

The Fintech 100 list by KPMG and H2 Ventures has predicted that global fintech investment is expected to jump 66 percent to over $20 billion in 2015.
Written by Aimee Chanthadavong, Contributor

The Fintech 100 list, published jointly by KPMG Fintech and H2 Ventures, has indicated in 2015 there was a dramatic increase in insurance and Chinese-based fintech startups.

The Fintech 100 includes a list of the top 50 established fintech companies from around the world, and 50 emerging fintechs.

H2 Ventures founding partner Toby Heap said since the inaugural launch of the list last year, he has seen a noticeable increase of insurance companies playing a larger role in the list, adding that the other change was the number of Chinese companies that have "gone a bit crazy".

He pointed to number one on the list being ZhongAn, a Chinese insurance company, as an example.

"They didn't exist when we did the list last year, and they did a $930 million Series A [funding] and a $10 billion valuation in the past year," Heap said. "It gives you some idea of scale and scope of the market potential in China because people wouldn't be putting that kind of money and those kinds of valuations if they didn't see the potential return on those."

Other Chinese companies that made the list included marketplace lending startups Qufengqi that came in at number four and Lufax that came in at number 11. A total of six Chinese companies made it to the top 50, and a total of seven Chinese companies made the 100 list.

KPMG Fintech partner and global co-lead Ian Pollari highlighted the move by the Chinese companies had been a vast improvement compared with last year when there was only one Chinese company in the top 50.

"The fact is that this is truly global; we've got 40 companies out of the US. Last year there was a high proportion from the northern hemisphere. We've now got 22 in APAC, which points to the balancing and the fact that fintech is a global dynamic; it's not just simply that all of the growth is going to come out of Silicon Valley," he said. "Clearly there is a real stronghold for tech growth and entrepreneurship, and fintech in a far more distributed way."

This year's Fintech 100 showed that 40 percent were made of companies from the Americas, while 20 percent were from EMEA, 20 percent from the UK, and 22 percent from APAC.

Additionally, the Fintech 100 included 25 "enablers", who are considered as companies looking to provide services. Of the nine Australian fintech companies that were listed, two companies -- Avoka and Metamako -- fell in the category of "enablers", while another two companies -- SocietyOne and Prospa -- made it to the established 50 list. The other companies were considered emerging fintechs.

Another highlight from Fintech 100 was the growth of payments, currencies, and transaction companies that made up a quarter of the list.

Pollari added that with the expected continued level of fintech investments globally, the list has predicted that by 2017, fintechs will have collectively raised in excess of $30 billion.

"The level of funding that's being attracted and being well documented reached the $12 billion mark last year. We're anticipating that to exceed $20 billion this year, and to put in context that was $100 million in 2008, so it's a phenomenal growth," he said.

However, a key theme that was brought up in discussion with media as part of the release of Fintech 100 was that Australian venture capitalists for a long time lagged behind VCs overseas, but have started to catch up in the last 12 to 24 months.

Prospa joint CEO Beau Bertoli said the current capital raising landscape compared with 24 months ago is "chalk and cheese".

"When we started the business and talked to a lot of VC groups, there was just very limited interest for those trying to create a name in the fintech space. But in the last 12 months we've seen a huge swing the other way, which is not just offshore money looking to invest, but there is a lot of onshore money," he said.

Similarly, Matt Symons, SocietyOne CEO, said when the company was starting out there wasn't any immediate resonance from venture capitalists compared with now where the conversation is more supportive and encouraging.

The release of the Fintech 100 comes off the back of the federal government recently announcing that it will inject AU$1.1 billion as part of its National Innovation and Science Agenda. The funding is expected to be used to incentivise innovation and entrepreneurship, reward risk taking, and promote science, maths, and computing in schools.

The agenda also includes a five-year AU$51 million investment to help students embrace the digital age and better prepare for a digital future; a AU$13 million investment also over five years to encourage women to head down a digital career path; and an additional AU$127 million to establish a new research support program.

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