KPMG published an extensive study of the way that blockchain technology grew and established itself in 2017. The community has seen significant development, and has begun to establish itself as a viable economic sector within the fintech section of the global economy. In general, more developed nations saw the largest involvement in new blockchain fintech, though smaller countries also experienced a significant jump in overall economic involvement in the budding business.
The sector set several notable records in the first half of this year, raising over USD $57 billion in financial fundraisers, much of the funding coming from unique blockchain-based fundraising processes known as Initial Coin Offerings, or ICOs. The majority of involvement came from Europe, the United States of America, and China, three sections of the world which were already known for their interest in financial technology and the development of new ways to transact.
Another pervasive trend is likely that the venture capitalists of the old order seem to be becoming increasingly interested in financial technology as a viable long-term investment. In particular, American Venture Capital saw a record amount of investment in financial technology, to the tune of USD $5 billion in traditional investments in the new industry.
The continent of Europe has led the lot of fintech-obsessed populations, with 198 deals totaling up to an impressive USD $26 billion this year. Next is Asia, whose constituents conducted 162 deals for a total of around $16.8 billion. The United States totaled up to $14.8 billion, with nearly 504 domestic deals in the fintech sector.
In some countries, a majority of the total deal amount comes from outliers. A good example of this trend is the United Kingdom, where a deal of around $12.9 billion accounted for the majority of their total investment and trade amount in the fintech sector.
But in some countries, outliers like these are relatively insignificant. For the United States, the highest deal on their extensive list was a simple $3.5 billion deal to buy Blackhawk Network Holdings. In the grand scheme of the global fintech economy, though, this is a relatively large deal. The Blackhawk buyout was actually the fourth largest deal made in the world in the first half of 2018. The highest deal was a Chinese deal to buy out Ant Financial for a massive sum of $14 billion.
China Grows And VC Adapts
It’s hard to make predictions on the future of the global fintech market, especially given the fluctuating nature of regulatory efforts by countries around the world. However, the current half of 2018 gives an insight into the massive growth of the Chinese fintech market. Though the huge Ant Financial transaction skews the statistics a bit, this quarter still represents an unprecedented amount of growth.
Venture capitalist firms have just now begun to catch up the unique funding efforts of ICOs on the blockchain. Part of the difficulty in staying ahead of the trend is that venture capitalist interactions are fundamentally different than the equity-based transactions that occur with tokens on the blockchain.
Moving forward, it is likely that increased VC involvement in the fintech market will incentivize companies to continue to look towards traditional funding as a more viable option to expanding business and merging.