Aidan Saggers and Chiranjit Chakraborty
Investment in the Financial Technology (FinTech) industry has increased rapidly post crisis and globalisation is apparent with many investors funding companies far from their own physical locations. From Crunchbase data we gathered all the venture capital investments in FinTech start-up firms from 2010 to 2014 and created network diagrams for each year.
The animation below depicts FinTech investments by year from 11 hub countries (coloured pink) to a broader set of recipient countries (coloured blue) from 2010 to 2014.
<Click on image to enlarge.>
Source: Crunchbase data and our own calculations.
The arrows indicate the direction of flow, the thickness of each line is proportional to the number of investments, and the node area denotes the total number of foreign FinTech investments into that particular country. To avoid the issue of missing data and purchasing power parity across the globe, we did not use the monetary value of these investments. Unsurprisingly, the USA and the UK attract the largest number of foreign FinTech investments; although the number of outgoing investments from the UK is relatively small (demonstrated by the lack of thick outgoing arrows).
FinTech investment is also revolutionising developing financial sectors in China along with other African and Asian countries. However, it is interesting that China is not one of the fastest growing nodes. An explanation for this is that the majority of venture capital investment in Chinese FinTech firms comes from domestic investors, which we have not captured in this animation.
Nevertheless, one can see the expansion and the growing interconnectedness of global FinTech investments from these network diagrams.
Aidan Saggers and Chiranjit Chakraborty work in the Bank’s Advanced Analytics Research & Statistics Division.
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Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.
Are al these investments doing the same thing, or are they all developing unique applications, or what?
Great read! Thanks so much for sharing!