While FinTech funding took a hit in the first quarter of 2020 due to COVID-19, some firms have been fortunate enough to find a cash infusion during these trying times.
According to a report by business intelligence company Adkit, the coronavirus pandemic resulted in a drop of almost 20 percent in FinTech investment worldwide between the months of December 2019 and March 2020. The total sum of investment reached $6 billion, the lowest it has been in any quarter since Q1 of 2017.
In addition, research published by Finch Capital, a VC based out of the Netherlands, predicts that the downturn is expected to last until the third quarter of 2020. On a positive note, the report claimed that the coronavirus pandemic will help FinTech solutions become more mainstream and win much-needed approval from regulators.
With that in mind, some FinTechs have been fortunate enough to find funding during these trying times. FinTech Capital Markets Gateway (CMG), which works to modernize the equity capital markets (ECM), recently announced it received a strategic investment of $25 million from several financial firms including Barclays, Citi, Fidelity Investments, Goldman Sachs, J.P. Morgan, and Morgan Stanley as well as existing investors including Canaccord Genuity, Franklin Templeton, StageDotO, and Shea Ventures. The funding will be used to support the company’s growth and expand its solutions to be the first ECM platform in the U.S. to provide digital connectivity between the buy- and sell-side.
Since its launch in 2017, the CMG platform has grown to nearly 100 buy side firms representing $12 trillion in AUM and 15 investment banks.
“CMG’s unique platform provides an efficient service in accessing the global capital markets,” said Todd Sandoz, Interim Co-Head of Global Equities at Barclays. “We have actively followed the company’s growth in recent years and are proud to support its mission to make transactions more efficient and less resource-intensive for the industry and for our clients. We look forward to its continued innovation in the space.”
In addition, Curu, a Colorado-based FinTech trying to build a more inclusive credit system, recently landed $3 million in seed funding, led by Vestigo Ventures, an early-stage Massachusetts-based venture capital (VC) firm. The round also saw participation from New York-based diversity-focused VC Harlem Capital, seed-stage investor Matchstick Ventures, Carolina Fintech Ventures (CFV), Techstars Ventures, Holt Accelerator, Illinois-based Chingona Ventures, and U.K.-based Upscale Fund.