Fintech is taking the world by storm, and investors are starting to notice. In 2014, a whopping $12.21 billion was invested in this sector. That figure is impressive enough on its own, but it becomes even more remarkable when compared to previous years.
For instance, in 2013 the market only saw $4.05 billion in investment. The vast disparity between the two years illustrates the rapid pace at which fintech is growing. Investors better hop on board now, to witness the most growth in this booming market.
Regional view of the market breakdown
Geographically, it’s a good thing if you’re a US investor interested in this market. However, European investors – particularly those from the UK and Ireland – shouldn’t despair. Together, these regions represent the largest strongholds of fintech investment in the world. The US, for example, saw a 215 percent increase in growth between 2013 and 2014, and this growth has continued strongly right into 2016. Silicon valley, in particular, is a hotbed of investment.
Meanwhile, across the pond, Europe is a strong player in the fintech investing market as well. Although year over year growth was slightly lower than the US, there was still a massive 136 percent leap between 2013 and 2014. We can thank the US and Ireland for that, with the two regions contributing 42 percent of the $632 million in European investment.
Maturing market for fintech investing
Currently, the fintech market is in a nascent stage, although it is quickly maturing to become a well established growth industry. The relative immaturity of the market suggests that investors will see significant growth in this area.
Looking back to 2014, fintech company Lending Club (NYSE:LC) made the year’s largest US tech IPO. The success of this venture marked the beginning of fintech’s move from innovative fringe technologies into the mainstream. Since then, investors have been focusing heavily upon early startup companies with big potential. Indeed, Accenture reports that 20 percent of all fintech venture capital deals done in 2014 were first round investments in beginning companies.
Now, in 2016, these companies have matured, with experience weeding out the weaker players. Thus, the riskiest phase of investment is over, for some of these early entrants into the market. For investors looking for a steadier, yet still bold, investment in the tech sector, this could be the key.
Start up odds still available for investors
For investors with a taste for gambling, however, there are still many new small cap companies in the market. NetCents Technology (CNSX:NC) is one wonderful example. The company enables secure, anonymous, self-administered payments for the purpose of making safe, on and offline purchases. According to a corporate update, “over the last twelve months, NetCents has evolved the platform from a simple payment processor to one that delivers payment options and money transferring capabilities on a global scale.”
As of April 6, 2015, share prices have fluctuated between a 52-week range of $0.19 and $0.29. NetCents Technology is but one example of a growing market for fintech innovators. Both startups and more established companies are recognizing the value and potential of this exponentially growing market. It’s a place of optimism for tech innovators, and it should be a place of optimism for investors as well.
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This article was originally published on April 6, 2016 on Technology Investing News.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.