New York’s financial sector is helping it outstrip Silicon Valley in terms of fintech start-up investment, according to a new report by Accenture and the Partnership Fund for New York City.
New York set to overtake Silicon Valley as fintech startup centre
the rate of Silicon Valley since 2008, says the report, with the trend accelerating innovation among the city’s global financial institutions – reports Finextra.
Global fintech investment tripled between 2008 and 2013 from $928 million to $2.97 billion and is expected to double again to between $6 billion and $8 billion by 2018. The first quarter of 2014 was the most active on record, with $1.7 billion invested globally.
Silicon Valley is still by far the world’s biggest recipient of fintech investment, but it is facing growing competition from New York and London. Indeed, a recent report by South Mountain Economics and Bloomberg Philanthropies pinpointed London as the new global centre for fintech investment, beating both Silicon Valley and New York in terms of employment numbers.
Looking at fintech deal volumes, New York is steadily closing the gap on Silicon Valley. It had one-third as many fintech deals as the Valley in 2011, two-thirds as many in 2013, and a near-equal number in the first quarter of 2014 (17 in New York compared to 19 in Silicon Valley).
Between 2008 and 2013, New York has had $1.1 billion in fintech investment, including $430 million last year. In the first quarter of 2014 it had $151 million in investment – its third-highest quarter on record.
Accenture forecasts that New York fintech investment could grow to $950 million by 2018, driven by rising demand from the industry, its clients and customers, for mobile, analytic, cloud regulatory compliance, and data security solutions.
“New York has every chance of being the prime beneficiary of the fintech boom in the coming years,” says Maria Gotsch CEO of the Partnership Fund. “It offers entrepreneurs proximity to perhaps the largest potential customer base of financial institutions in the world. It has a burgeoning venture ecosystem, and one of the world’s largest financial technology workforces.”
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