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Fintech funding in New York City has suffered a drop even though deals increased for the second straight quarter, according to a new report.

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In the report from data provider CB Insights, The Global FinTech Report: Q1 ’17, it found that during the first three months of the year, fintech funding to venture capital-backed New York companies dropped by 35 percent on a quarterly basis. However, while financial technology deals in the state rose by 26 percent from Q4 ’16, it registered a 33 percent drop below the same quarter last year.

During the first three months there were three New York City companies – Namely, Trumid, and Payfone – who were among the top ten U.S. financial technology backed deals.

Namely raised $50 million in Series D funding from Altimeter Capital, Scale Venture Partners, Sequoia Capital, Four Rivers Group, Matrix Partners, and Greenspring Associates.

Trumid raised $27.6 million in Series D funding from Thiel Capital, and Payfone raised $23.5 million in Series E funding from BlueCross Blue Shield and Andrew Prozes.


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In California, though, the scene is different. During Q1 ’17, fintech funding to VC-backed firms in the sunny state rose by 39 percent; however, deals fell for the second consecutive quarter, and declined 28 percent from the same quarter last year. California-based SoFi raised $500 million during Series F funding from Silver Lake, GPI Capital, and Softbank Group.

Sector Boom in Europe

Yet, while funding and deals may have dropped in the U.S. it still managed to raise $1.1 billion in VC-backed fintech startups across 90 deals during Q1 ’17. This is compared to Europe, which during the same time period, raised $667 million across 73 deals. Unlike the same quarter last year, though, Europe fintech funding in Q1 ’17 increased 121 percent while deals rose by 38 percent.

Despite the fact that the U.K. is to remove itself from the European Union in 2019, this doesn’t appear to have done much to stem the flow of funding in the nation. So much so, that U.K.-based Atom Bank, managed to raise over $100 million in Series C funding, led by BBVA, the multinational Spanish banking group, during the first three months of 2017.

Funding Circle also raised $100 million in Series F, which contributed towards the $328 million raised by U.K. VC-backed financial technology companies.

As a result, it looks as though European fintech investment is on track for a record year with projections from CB Insights that it could surpass 2016’s total by 57 percent, if the current pace continues to persist.

Featured image from Shutterstock.

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