Fintechs received almost half of $1 billion in startup funding from last quarter
The quarter ending December 2018 saw Australian fintechs receive $508 million in funding.
A new report of funding for Australia's startups and young tech companies by Techboard has found that these companies received an impressive $1.066 billion in funding in the quarter ending December 2018. While this was a small reduction from the $1.085 billion in funding received during the September 2018 quarter, it's an almost 40% increase from the previous year where there was $762 million worth of funding.
Fintech companies received nearly the lion's share of funding in the December 2018 quarter, with $508 million finding their way to fintech startups. Business challenger bank Judo Capital received $350 million of this through a debt facility with Credit Suisse at the end of November 2018. This followed its $140 million funding round in August 2018.
In total, Techboard identified over 160 funding events for the December 2018 quarter. This includes accelerator program fundings, acquisitions, equity crowdfunding, grants and venture capital (VC) funding.
Interestingly, the largest type of funding was debt and these were exclusive to fintech companies. Debt funding represented $390 million (36.6%) of the funding mix. After this, private investment, which included angel, VC and other large-scale private investment, accounted for $362 million (33.9%). This is an increase of 230% from the previous year but down from September's $570 million funding total.
Some notable fintechs made up the private investment figure in the December quarter including small business lender Prospa which were reported to have raised $43.3 million from existing investors. Data Republic and Athena Home Loans also had Series B round funding which saw them raise over $20 million each. This follows on from a recent report from CB Insights which showed the growth of VC-backed fintech funding globally from 2014 to 2018. In Australia, VC-backed fintech funding grew from $69 million in 2017 to $343 million in 2018, representing a 396% growth.
Techboard's report shows funding tracking upwards from 2017, which is good news for Australian startups. According to the Startup Muster 2018 report, 49.2% of startups are currently trying to raise funding and one third are relying on private equity funding. Startup Muster's report found that 41% of startups have approached at least one investor but only 33.8% of startups reported securing at least one investor.
The importance of securing investment is highlighted in Startup Muster's findings as well; 37.5% of survey respondents agreed that life circumstances that require a stable income were the main hindrance when founding a startup and this was followed by financial dependents such as children or a mortgage.
You can read Techboard's full report here.
- Australia and New Zealand might collaborate on open banking
- SocietyOne: Peer-to-peer lending offers a “better deal than the bank”
- Separating fintech from finance: Why we have fintech influencers
- Government maintains R&D eligibility, offers more clarity on claiming
- Raiz Invest to introduce machine-learning technology to its platform