Venture funding of fintech companies has decreased drastically on the background of the negative consequences of COVID-19 pandemic, Bloomchain.ru reports citing a study by CB Insights analysts.

In the first quarter of 2020, the index of venture capital investment in fintech dropped down to USD 6.1bn (based on the analysis of 404 deals). It is the worst index in the past four years.

The study shows that most companies are preparing for the consequences of the pandemic. In particular, many startups have accelerated work on their products ahead of possible slowdown of the economic development.

China has suffered the most in terms of fintech investment: in the first quarter of 2020, the country’s fintech industry demonstrated the worst indicators since 2015. CB Insights analysts believe the reason is the significant decrease of business activity in China due to the coronavirus outbreak. The study points out that the fintech industry registered just 29 deals worth USD 175m in the first quarter of this year. For comparison, in the fourth quarter of 2019 the industry registered 33 deals worth USD 299m.

The decrease of funding for fintech companies started in China, and the tendency quickly spread. For instance, the volume of investment in fintech industry has dropped by one fourth compared to the previous quarter in other Asian countries as well as Australia and North and South America.

It is noteworthy that on the background of general decline, Africa is the only place on the map where the number of venture capital-backed fintech deals grew in the first quarter of 2020.

Just 3 unicorns emerged in fintech in the mentioned period due to the decline: HighRadius, Pine Labs andFlywire. The total number of fintech companies with capitalization over USD 1bn reached 67. Their total capitalization makes USD 253bn.

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