With more successful FinTech companies raising later stage funding the size of deals is increasing.? In 2016 the number of deals above $5m hit a 3 year high with 552 deals closed worldwide. In contrast the number of deals valued $1m and below fell significantly worldwide in 2016, to a three-year low of 441 deals.
- The share of deals under $1m fell by 10% in 2016, while the share of deals valued above $5m sat at 38.4% in 2016, an 8.3% increase on 2014 figures.
- Deals between $1-$5m were as common as deals up to $1m in 2016, each holding a 30.8% share of the total number of deals.
- Q1 2017 seems to reinforce the shift to later stage deals with deals valued under $1m less common than deals valued between $1-$5 and deals valued above $5m as high as 43.7%.
Investors pull back the most on small deals as the number of deals to FinTech companies declines
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- In 2016 the number of deals $1m and below in Europe and North America fell below levels in 2014, despite increases in 2015.
- In Europe the number of deals above $5m increased by 56.5% between 2014 and 2016. Despite failing to surpass the number of deals closed above $5m in 2015, North America still saw an increase of 12.4% between 2014 and 2016.
- In 2016 North America closed 2.2 times the number of deals closed in Europe. However, in Q1 2017 this gap fell, as North America only closed 1.7 times the number of deals closed in Europe.
- Europe typically has a higher share of deals in the 0-$1m sector than North America. In 2016 the share of deals in this sector was 32.6% in Europe and 29.2% in North America. In Q1 2017, these figures fell to 26.1% in Europe and 22.2% in North America.
Asia has seen significant growth in the number of deals valued above $10m in the past three years
- The number of deals valued above $10m is increasing faster in Asia than in North America and Europe with an CAGR of 41% compared with a CAGR of 5% and 17% in North America and Europe, respectively.
- Despite a gradual fall in deal share for investments valued $0-$1m between 2014 and 2016, the number of deals in this segment has grown since 2014. Moreover, Q1 2017 saw 34.5% of deals valued at less than $1m.
The average deal size, for deals closed above $25m was largest in Asia in 2016
- Average deal size for deals over $25m in 2016 was almost 3 times larger in Asia than it was in North America in 2016.
- Asia has seen an exponential increase in average deal size between 2014 and 16 with a CAGR of 47%. In comparison North America has seen a gradual decline with a decrease of 14% CAGR between 2014 and 2016.
- Q1 2017 saw average deals size for deals valued above $25m rocket in North America, while Asia saw a sharp fall to 60m.
The share of larger deals is increasing worldwide. Even with the fall in the number of deals in 2016, in Europe the number of deals above $5m still increased with most of the decline attributed to a fall in deals under $1m. 2017 has already seen a large number of large deals closed across the world. The UK Atom bank and China Xiaoying Financial both closed deals valued well over $100m, in march and in the US, online loans provider, SoFi received $500m in Series F financing from Silver Lake Partners and others.
