Chinese fintech funding activity saw a sharp plunge in 2019, after posting a global lead the year previously.
A report from IBS Intelligence indicates that global investment in Chinese fintech start-ups stood at USD$4.9 billion in 2019, for a seven-fold contraction compared to the peak of $34 billion reached in 2018.
Data from Tacxn indicates that B2C fintech firms raised just $2.15 billion in 2019, as compared to $16.78 billion the year previously, while for B2B fintech firms funding fell to $2.76 billion in 2019 from $17.92 billion in 2018.
While some observers have imputed the plunge in funding to the Sino-US trade war in tandem with the woes of China’s beleaguered P2P lending sector, others point to the maturity and strong capitalisation levels of established Chinese fintech players.
“China’s evolved FinTech ecosystem comprises ten large Unicorns,” said Naveen Suyra, founder of India’s FinTech Convergence Council.
“Most of the companies are already in their high growth stage and need not require more funding as they have already raised enough capital in the last few years.
“Many of the players are already profitable and might go public soon.”
“The FinTech ecosystem is pretty robust in China and is evolving by the day,” said Oscar Ramos from Chinaaccelerator – a start-up accelerator focused on Chinese Internet enterprises.
“Payments and lending start-ups dominated the segment a few years ago. We see sub-segments such as InsureTech, Trade Finance, FinTech-enabling other sectors, and enterprise FinTechs receiving increased funding and traction in the coming months.”