Fintech funding: Digital lending startups lead with 70% jump
Citi Ventures invested in Defacto in the third quarter
Digital lending startup funding drove global fintech funding rounds during the third quarter as automated lending strategies gained investor attention.
Funding for these startups reached $1.7 billion in Q3, up 70% sequentially, according to CB Insights’ State of Fintech Q3 report published in October. As fintech funding rebounded in Q3, digital lending deals led the charge.
The jump in funding for digital lending startups came despite only 60 deals closing in Q3, a 60% drop year over year as the average amount of funding per deal ticked up, Elif Yayla, senior fintech analyst at CB Insights, said during the analytics company’s November webinar.
“Digital lending is indeed a major trend shaping the fintech market today,” Luis Valdich, managing director at Citi Ventures, told Bank Automation News. “Amid record high levels of consumer debt, significant gaps in access to credit for [small and medium-sized businesses] in the global supply chain and the COVID-accelerated digitization of modern life, it’s no surprise that digital lending led fintech funding this year.”
Citi Ventures has invested in several digital lending startups, including SaaS lending cloud platform Lentra. On Nov. 18, the venture group also invested $10.8 million in short-term financing provider Defacto, according to Crunchbase.
Q3 funding
Digital lending startup investment was a global trend in Q3, led by Asia and followed by the United States and Europe, according to the CB Insights report.
Top digital lending equity deals in Q3 included:
- India-based B2B SaaS fintech Perfios raised $229 million in a series D funding round on Sept. 11, led by Kedaara Capital.
- Indonesia-based microfinance technology platform Amartha raised $206 million on Sept. 13 in a round led by International Finance Corp.; and
- U.K.-based business finance provider Fleximize raised $168 million on Sept. 20 in a round led by Goldman Sachs Asset Management and Citibank.
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