US-based data company CB Insights recently reported that VC investment in Australian Fintech had grown from $67m in 2017 to $343 million in 2018. While this does show massive growth in funding for Australia’s fintech sector, data from Australian Startup Data Company Techboard indicates that this represents a significant understatement of the sector’s growth. (Edited).
Techboard has recently released its Report for the December quarter 2018 which revealed another $1.066B in funding for Australian Startups and young tech companies. This was the second consecutive quarter of over $1b funding across all sectors and took the total amount of funding for the 2018 Calendar year to over $4b, up around $1/2b revealed in the 17/18FY Funding Report.
“When I saw the CB Insights 2019 Fintech Trends to Watch report* I thought it was a great opportunity to see how Techboard’s numbers compared to one of the top startup data companies. Even when just looking at private funding, which is mostly VC, Techboard’s capture of funding events was between 40 and 95% higher than that reported by CB Insights.” said Techboard Co-founder and CEO Peter van Bruchem.
Techboard identified over $131m in private funding going to Australian Fintech Companies, jumping to $487m in 2018. Although private funding only tells part of the picture, with early stage fintech companies listed on the Australian Stock exchange jumping from $61.3m during 2017 raising to $168.6m in 2018. Overall total Fintech funding including ICOs and debt jumped from $718m in 2017 to a massive $1.359b over the course of 2018.
Since the publication of this post KPMG's Global Pulse of Fintech report was released revealing $842m VC/private investment in Australian Fintech during 2018 (more than reported by Techboard). Although we don't know every deal which contributed to that total, there are two significant funding events which most likely contributed to that total were older than covered by Techboard, Ansarada (founded 2005) which raised $24m and Temenos (founded 1995) which was acquired for $340m. If these two deals are added to Techboard's total of $487m this would take Techboard's total for private funding to $851m. The benefit to Techboard Data Subscribers is that they can access the details of these deals on the Techboard Platform.
The size of funding events has also been growing. The largest single event captured in 2017 by Techboard was a debt facility of $260m by Moneyme, the largest private raise of 2017 was Prospa’s $25m and the largest public raise was Zipmoney’s $40m placement with more than $50m being raised by Hcash in an ICO. Those numbers appear quite small when compared to 2018, where Judo raised $140m and Airwallex raising $109m privately, Afterpay raising $117m in a placement and Judo Capital securing a $350m Debt facility. Below the top end funding events average deal size value is also moving higher.
New South Wales and Victoria dominated fintech funding with over 95% of funding going to those states. Overall Victorian companies secured a much higher percentage of overall funding than NSW based fintechs (67% vs 27%) although this was largely due to a few very large funding events by Victorian-based Judo Capital, Airwallex and Afterpay. New South Wales however saw a markedly higher number of funding events for fintech companies 42 compared to Victoria’s 26.
“We capture more funding data on Australian startups than companies like CB Insights, Pitchbook and Crunchbase as we have a local focus, screening deals from the growing list of over 3000 companies on the Techboard Directory and due to deals being reported directly to us by companies and investors.” said Peter van Bruchem.
“We pick up most of the funding events that are reported but we know there are significant investments that we miss, probably most notably we have not included any raises by other emerging neobanks, VoltBank and 86400. We are also aware of other funding events that have taken place but for undisclosed amounts for the likes of Basiq, Growsuper and others.”
Techboard operates the Techboard Directory with over 3,000 company profiles and publishes free funding reports on a quarterly basis, supported in part by corporate sponsors. Techboard has also very recently opened up its funding data to commercial subscribers, with Australian government departments and agencies being the company’s first data customers.
NOTE: the figures in this article are in relation to funding events for companies on Techboard with the primary category of either "Fintech" or "Crypto".
See the CB Insights Report.
* as featured in Finder.