FT Partners Releases 2021 Fintech Almanac Report

How 2021 Revolutionized Fintech

Earlier this year Financial Technology (FT) Partners published a report that provided a comprehensive view of the fintech deal activities that occurred during 2021. According to the report, 2021 was an excellent year for fintech, as financing for private fintech companies more than tripled (from $45.6 billion in 2020 to $141.6 billion in 2021) and every region globally got to experience record levels of investment activity. The pandemic has helped push companies to digitize their operations and production, and increasingly more consumers are favoring fintech applications for banking, payments, and investing. The fintech industry also saw the largest year in the sale of fintech companies and non-fintech acquisitions made by fintech companies, with approximately $348.5 billion making up the volume of these transactions.

It should be noted that at the start of 2022, equity markets in the fintech industry have fallen steeply. Many companies in the high growth / high multiple camps have been suffering the most at the start of this year, which is where many fintech stocks happen to fall under. It’s possible that private markets could be hit as well, though private company growth rates tend to be higher than public company growth rates and investment horizons are longer, so they could hold relatively more steady than public markets. 

Regardless, it doesn’t seem that the demand for fintech is going to be changing anytime soon. Many consumer-focused fintech companies continue to gain shares across markets globally, as banks and other traditional financial institutions still have a long ways to go in digitizing their businesses as well.

Key Takeaways

The main takeaways from this report:

• 2021 was the largest and most active year for the fintech industry in terms of both financing activity, mergers, and acquisitions ($141.6 billion in terms of financing and $348.5 billion in terms of mergers and acquisitions)
• There were seven $1 billion+ mergers and acquisitions in 2021, which were the most ever in a year
• The fintech companies with the largest financing activity this year include Robinhood, DevotedHealth, Stripe, InsightSoftware, Klarna, and NYDIG
• Some of the most active fintech investors for this year include TigerGlobal, Softbank, Sequoia, GFC, and Andreessen Horowitz
• North America and Europe were the top two regions with the highest fintech financing activity in 2021

Implications for the Future of Fintech

Fintech is an increasingly growing field and has gained further traction as a result of the pandemic, with consumers pursuing ways in which they can further digitize their transactions. The demand for fintech is high, and will most likely continue to remain as such for the foreseeable future. New investors should get a head start if they wish to get a piece of the pie, as fintech will only continue to grow from here.

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