Banks are driving capital investment in the fintech space

CB Insights has said that financial services firms are pouring big money into the fintech space.

According to a report released Tuesday, financial services companies have pumped $8 billion across 329 Fintech deals during 2019. Roughly 50% of those capital injections have come from banks, while the third quarter experienced a new record for corporate venture capital (CVC) in the space. The report notes that banks and other firms are looking to put money into investments with upside at a time that interest rates are low.

The uptick in CVC comes at a time that overall fintech spending is shattering new records. Through September, fintech hit a record of $24.6 billion in capital raising.

The report also shows that financial services corporate venture capital deals (CVC) popped roughly 500% from 2014 until this year. The report also shows that the bulk of these deals are happening in California.

CB Insights on Fintech Investments

The most active companies in the CVC space over five years for fintech include Citi Ventures (66 deals), the VC arm of Goldman Sachs (64), and American Express Ventures (55).

Additional insights from the report include:

• Banks are rapidly accelerating their CVC activity, with annual deal activity up over 6x between 2014 and 2018.
• North American share of financial services CVC deals has fallen from 58% in 2014 to 41% in 2019 YTD. Meanwhile, fin services CVCs are increasingly active in Europe, where deal share has grown from 12% to 28% over the same period.
• From 2014 to 2019, 28 CVCs have backed at least 1 unicorn, with Goldman Sachs investing in 5 of these $1B+ startups.