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CrunchBase Monthly Market Momentum

The Business Graph was built on the realization that the startup and venture investment world has evolved. Startups, as we know them, have expanded from disruptive, tech-centric hardware and software companies to a globally inclusive set of products and services meeting new demands.

With that, the schema of markets and categories changes on an almost daily basis. New markets are created with each product launch, and archaic categories can quickly become irrelevant. The Internet of Things and Drones, for example, have already started to overshadow Social Media and Data Storage.

Using the CrunchBase dataset, we can attempt to identify the next markets ripe for startup disruption by analyzing all the recent funding rounds from the most expansive startup dataset. This week, we pulled all the venture rounds from July and identified the categories with the biggest increases in funding activity. Last month, it was all about Financial Services.

The 30% increase in venture funding for Financial Services startups is a measure of the momentum over the past six months. We calculated momentum starting with the moving average from the prior six month period (January through June) and used the percentage change for the updated measure (February through July). The sixteen Financial Services funding rounds in July represented a 60% increase versus the average of the prior six months and bumped the moving average from just ten to thirteen per month. So what does this mean? It means that a new market is starting to emerge: FinTech.

Last month, venture investors got behind innovative startups revolutionizing personal finance through technology. Tiger Global made the biggest bet with a $75M  Series C round for AvantCredit, a Chicago company providing a machine-powered online lending platform. Similarly, Funding Circle of London raised a $65M Series D from Index Ventures, Ribbitt Capital, Union Square Ventures and Accel Partners to expand its small-business lending platform stateside. Ribbitt Capital also participated in a $4.1M seed round with Felicis Ventures for Activehours, an App for third-party paycheck advances. Online investment advisers Upside, Trendrating and BasisCode each raised sizable rounds to try to compete with well-funded players Betterment and Wealthfront.

Earlier stage Financial Services companies in Europe also attracted seed funding from a variety of sources. Lithuania, United Kingdom, Switzerland and the Netherlands each landed a seed round. Confirming the FinTech frenzy, the London FinTech Program run by Startupbootcamp unveiled its inaugural class at the end of July to join the SixThirty program in St. Louis in cementing the importance of the Finance vertical. Despite the global nature of Finance deals this year, programs like FinTech Innovation Lab and Barclays Accelerator are maintaining a strong presence in London.

Among other markets with July momentum, mobile apps appear to be making a bit of a resurgence. The 31 funding rounds tallied in July was the highest total for any month since August and September 2013 when Apps drew 36 and 34 funding rounds, respectively. The median round size for July was just under $1M, with Secret’s Series B the one significant outlier at $25M. Trello’s Series A and the $13M round for BlueStacks were the only other funding rounds above $10M. The increase in smaller seed rounds was the main contributor for the trend reversal. Since the end of last year Apps were on the outs, but July points to a rebound for venture investors making early bets on the next killer mobile app.

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