China’s FinTech Investments See Remarkable Boost in 2018
Neil Shen, the founding and managing partner of Sequioa Capital China, has expressed optimism over investment in the Chinese internet sector according to a statement that he made in a press conference at the World Internet Conference held on 8th November 2018.
This statement comes in the wake of a strong rebound in FinTech investments this year.
The first half of 2018 witnessed a funding of almost $20 billion. This record-breaking funding was driven in large part by $14 billion in Series C Funding that Ant Financial gained in 2018.
This remarkably large investment was equal to the aggregate of all FinTech investments from 2014 to 2017.
There were also eight other deals exceeding $1 billion dollars.
This funding will drive the aggressive international expansion of the Ant Financial payment service Alipay which is currently providing its financial services to 870 million users around the world.
In the second quarter of 2018, a record $17.1 billion was raised in 21 transactions. The previously mentioned Ant Financial raised $14 billion, making up the bulk of this amount.
FinTech investment will receive a major boost since Ping An is devising a strategy to invest $15.8 billion over the next ten years. This will stimulate development in financial technologies that are driven by high-tech innovations like block chain and artificial intelligence.
Almost half of China’s FinTech transactions made during the year’s first-half exceeded $110 million.
This is a very strong rebound from the momentary drop in FinTech investment that came as a result of government regulations that were later relaxed.
FinTech investments have shown a steady increase since 2014. From 2014 to 2016, FinTech deals in China worth over $100 million increased from 9.3% to 21.9%.
Chinese FinTech firms have been bolstered with more than $40 billion in investments since 2014.
The years from 2014 to 2016 witnessed a remarkable 11 fold growth in investment owing to favorable government policies in China while political tensions in Europe and valuation problems in the US drove investors eastwards towards ASEAN countries.
FinTech companies of China managed to raise an impressive $12.1 billion in 2016. Investment skyrocketed in response to a major second quarter $4.5 billion Series B funding that was raised by the Ant Financial Services Group, an affiliate of Alibaba.
Banks in China are currently looking to digitize their financial services and this has provided an impetus for investment in B2B-based FinTech firms, who now aim to digitally transform the banking system. Banks are now heavily investing in cutting-edge technologies like block chain and big data.
In conclusion, since Southeast Asia has a significant proportion of the world’s population, almost similar macroeconomic situation, a large population that is under-banked, it is very likely that this region will be center stage for a global banking expansion.