2017 is on target to be the second strongest year ever for fintech financing volume. The third quarter of 2017 witnessed the second highest financing deal count. The banking sector continues to dominate but it has been a stunning quarter for mega payments deals.

Another strong quarter with third quarter fintech deals the second highest ever with 412 transactions, only behind the first quarter of 2016, which had 438. Q3 2017 financing volume hit $5.1bn, lower than the prior quarter ($8.8bn), but higher than in the first quarter of the year ($4.3bn).

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Figures released by FT Partners (the only investment bank focused exclusively on fintech) in its Q317 FinTech Insights Report show that the banking sector continues to dominate.

It is the most active sector this year in both the number of transactions (356 year-to-date) and financing volume ($6.3bn year-to-date).

2017 FinTech financing volume in Europe ($5.3bn) is already more than twice the financing volume of 2016 for the region ($2.6bn).

And Europe also boats the four largest M&A deals in the third quarter, all acquisitions of payments companies:

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  • Vantiv/WorldPay in a $9.9bn deal;
  • Hellman & Friedman/Nets in a deal worth $5.3bn;
  • CVC/Paysafe in a $3.9bn deal, and
  • Ingenico/Bambora in a deal worth $1.7bn

Third quarter 2017 M&A volume ($32.9bn) was the highest since Q4 2015 ($50.5 bn), which included Visa’s $23.4bn acquisition of Visa Europe.

This quarter had eight $1bn+ M&A deals, the most since Q4 2015, which also had eight.

In the year to date, FT Partners has tracked 1,160 fintech financing transactions, an annualised total of around 1,550, the same total as in the record year of 2016.

Third quarter notable financing transactions include:

  • Kabbage; Investment by Softbank of $250m;
  • Suishou: investment by KKR of $200m;
  • FGI; undisclosed investors, $140m;
  • Neybar: investment by Goldman Sachs of $132m;
  • Bread: investors include Menlo Ventures, Bessemer Venture Partners, RRE Ventures, total investment of $126m;
  • Toast: investors include Lead Edge Capital, Generation Investment Management, Bessemer Venture Partners, total investment of $101m, and
  • Coinbase; investors include Balyasny Asset, IVP, Spark Capital and Greylock Partners, total investment of $100m

Regionally, in the year to date North America accounts for 539 deals worth $7.5bn, 42% by volume of all deals.

Europe ranks just ahead of Asia by volume by 29% to 27% ($5.3bn to $4.9bn).

In the VC sector, FT Partners reports that Ribbit Capital has been the most active investor with 15 investments in the year to date, just ahead of Sequoia, NEA and Accel, each with 14.

Global fintech M&A deals for the year to date total 675, suggesting that 2017 is on course for around 900 such deals, against a record high of 958 in 2014.