(Bloomberg) — China and millennials to the rescue: Bucking wider conditions in Silicon Valley and the market for initial public offerings, funding for venture capital-backed fintech startups is on track to hit new highs in 2016.
The sector will exceed last year’s total by 36 percent if companies continue to raise money at the same rate as in the first quarter, according to a new report from KPMG International and CB Insights. China-based Lu.com and JD Finance both inked deals worth $1 billion or above, while Oscar Health Insurance’s $400 million and robo-advisor Betterment LLC’s $100 million funding round helped push the tally higher following what proved to be a tough end to 2015.
“Fintech had a very strong start to the year, and with the recent multibillion dollar investment in Ant Financial in April, we are starting to see fintech move into the mega-deal space,” Warren Mead, global co-leader of fintech at KPMG International said in the report.
The funding comes at a difficult time for the broader startups space. According to an earlier report from the same authors, 2016 has seen more startups receiving lower valuations through down rounds or markdowns than entering the billion-dollar Unicorn club.
Concerns over some fintech areas have also been rising, given recent high-profile troubles at the biggest marketplace lender in the U.S., LendingClub Corp. Moreover, there’s an evident geographical bias to the year’s bumper first quarter, since marketplace lenders in Asia accounted for three of the four largest funding rounds.