According to a “Digital Disruption” report by Citigroup, China has overtook U.S. as the number one investor in Fintech. In terms of global investment, China more than doubled it’s share from last year and is currently investing in 46% of the world’s fintech, while the U.S. is currently investing in 41% (down from 56% in 2015).
This phenomenon can be attributed to several factors. Firstly, private markets in the U.S. has been hindered by financial regulations. Firms such as Lending Club and OnDeck are faced with either the burden of these regulations, or they have failed to meet their expectations. On the other hand, the lack of regulations in China, as well as the growing middle class allows businessmen to invest in fintech for those who are eager to capture the growing fintech market. Currently, China has the highest volume of financial transactions of any country. The opportunities of fintech in China is unlimited.
Additionally, firms in China receive higher valuations and funding from venture capitalists. The biggest of all is Ant Financial (Alibaba’s online payment platform with over 450 million active users) with a valuation of $60 billion. In contrast, the top valuation in the U.S. is Stripe (another online payment platform) with a valuation of $9 billion.
Sources:
http://fortune.com/2017/01/23/china-fintech-invest-citi-report/
https://ir.citi.com/5X%2BQYT5l2T%2BYUV4%2FL%2FhUjyK%2B0cD27TLg380o6tX3OwKdy7TrZXEKM9ByXlGUuCvXEjpUnEPhKoU%3D
http://www.itwire.com/business-it-news/business-intelligence/76564-china-overtakes-us-in-fintech-investment-report.html