April 26, 2017 / 2:33 PM / 5 months ago

Fintech "unicorns" swell to 22, but Q1 fundraising drops

Post-it notes are displayed in the UBS "fintech lab" at Canary Wharf in London, Britain, October 19, 2016. REUTERS/Hannah McKay

LONDON (IFR) - There are 22 financial technology “unicorns”, or startup companies now valued at US$1bn or more, that have an aggregate value of $77 billion, according to a report released on Wednesday.

CB Insights said in its latest report on the fintech industry that half of the unicorns are based in North America, seven are in Asia and four are in Europe.

They include SoFi, the online lending company that raised $500 million earlier this year to give it a $4.5 billion valuation; and China Rapid Finance, which was valued at $1 billion after filing for an IPO at the end of March.

Europe has eclipsed other regions this year with a surge of fintech activity, according to the latest CB Insights global fintech report, which analyses funding activity for venture capital-backed fintech firms.

There were 73 deals for VC-backed fintech companies in Europe in the first quarter, up from 42 in the previous quarter and 53 in the first quarter of 2016. The deals raised $700 million in the latest quarter.

There were 226 deals globally in the first quarter, up from 202 in the previous quarter but down from 256 in the first quarter of 2016, the report showed. The latest quarter raised $2.7 billion, down from $4.9 billion a year ago.

The number of deals in North America fell to 98 (raising $1.2 billion) from 111 in the previous quarter and 146 a year ago. There were 42 deals in Asia (raising 800 million), down from 49 a year ago.

CB Insights estimated investment to VC-backed companies is on track to drop 18 percent this year from 2016, although funding in Europe is forecast to jump 57 percent this year after an end to the region’s funding drought this year.

UK fintechs Atom and Funding Circle led the recovery as each raised $100 million or more in the first quarter. No company raised more than $50 million in Europe in 2016.

The report showed Santander, Goldman Sachs and Citigroup or their venture capital arms have made the highest number of investments in fintech firms since the start of 2016, each making 8-9 investments.

Reporting by Steve Slater

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