Report: Investments in Israeli FinTech in 2019 Rise to Record $1.8 Billion

Sector increased by nearly 84% in past five years; last year saw six mega rounds totaling over $1 billion

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By Lidar Gravé-Lazi

Investments in Israeli FinTech companies reached $1.8 billion - an all-time high, according to a new report recently published by NGO Start Up Nation Central (SNC).

According to the report, this investment accounts for 5% of all venture stage FinTech investments worldwide.

The findings found that in Israel today there are 529 Fintech companies, up from 288 in 2014, marking an increase of nearly 84%.  

"The sector is diversified, offering an array of technologies and solutions" the report stated. SNC divided companies into seven subsectors based on their specific area of focus: The largest subsector is Trading and Investing, followed by Payments and Money Transfer, and Enterprise Solutions. Additional subsectors include Anti-Fraud, Risk and Compliance, InsurTech, Lending and Financing and Personal Finance Management. However, most equity investments were concentrated among a small number of companies.

The findings indicated that there were 12 companies that raised over $100 million in equity, accounting for 58% of the sector's total equity investments between 2014 and 2019. Among these leading companies include Lemonade, Fundbox, Payoneer, and eToro.

The report also found that in 2019 Israeli FinTech recorded six mega rounds, totaling over $1 billion, compared to three mega rounds during the period of 2014 to 2019.  
In April 2020, an additional mega round of $145 million was raised by BioCatch to further develop its behavioral authentication solution.

SNC also addressed the COVID-19 pandemic in its report and its impact on the Israeli FinTech sector. It noted that in the short-term parts of this industry would be at risk as foreign investors might stay away during the pandemic period and local investors will focus on protecting their portfolio companies.

"In the longer term, however, Israeli FinTech companies that survive the current crisis will see more business opportunities, as COVID-19 has accelerated many trends toward technology adoption, such as digital payments and anti-fraud solutions," the report concluded.