Despite economic headwinds from the COVID-19 pandemic, fintech funding volumes continued to move in a positive direction in the third quarter, nudging one of the largest quarterly volumes for fintech financing ever.

About $12 billion was funneled into fintech companies across 459 deals in Q3, marking the third-largest quarterly volume ever, according to FT Partners Research “Q3 2020 Fintech Insights” report released today. Third-quarter results, however, trail third-quarter fintech funding volume in 2019 at $12.9 billion, and 2018’s second-quarter volume at $24.4 billion.
Several big-ticket financing rounds buoyed overall volume, with 29 financing rounds north of $100 million occurring last quarter. To give this some context, there have been 74 funding rounds of $100 million or more in 2020.
These are some the most notable fintech funding rounds in Q3:
Robinhood’s $660 million round
Menlo Park, Calif.-based Robinhood took home the prize for the largest funding round in the third quarter, with a $660 million Series G across two rounds — a $200 million round in August and $460 million in September. The impressive injection comes after Robinhood’s platform crashed several times in March, creating problems for trading equities, options and cryptocurrency that resulted in several lawsuits amid violent stock market swings.
Point-of-sale lenders rake in $1.15 billion
Banking and lending remained the most active sector in fintech, boosted by investor interest in buy-now-pay-later companies. Affirm, which works with 6,000 merchants in the U.S. to provide alternative credit to more than 5.6 million consumers, raised $500 million in a Series G round in September. Its competitor, Sweden-based Klarna, outraised its American counterpart with a $650 million round, notably backed by the Government of Singapore Investment Corporation.
Point-of-sale lending has boomed this year as consumers flocked to online shopping, bolstering e-commerce volumes. Point-of-sale lending is growing at a much faster rate than traditional unsecured lending, according to recent McKinsey research, and more than doubled between 2015 and 2019.
Chime’s $485 million deal
Chime is part of a fast-growing class of well-funded fintech startups touting digital banking offerings, and its $485 million funding round in September bumped its valuation to $14.5 billion. The neobank has more than tripled its transaction volume and revenue in 2020, and is signing up hundreds of thousands of new customers each month, according to an October CNN report. Chime’s recent capital injection reflects investor interest in challenger banks; another notable third-quarter funding round includes Greenlight’s $215 million deal, which pushed the digital banking startup into investing and the B2B space, inking a deal with Chase.
The recent strength in fintech funding builds on the rebound in the market in the second quarter, after funding slumped in the first quarter when the coronavirus pandemic sent shockwaves of uncertainty through the global economy.
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