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<a href="http://www.businessinsider.in/searchresult.cms?query=Indian+startups&amp;sortorder=effectivedate">Indian startups</a> collectively rose close to $6.7 billion in 2015. While that’s a full 100% hike from last year’s figures’ it’s harder to raise money now. Basically, anybody with a .com can’t just raise money at any chosen valuation.<br />
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This has been triggered by a series of setbacks in startups including layoffs, shut downs and roll-backs. VCs are pickier now, and with more people willing to join the <a href="http://www.businessinsider.in/searchresult.cms?query=startup&amp;sortorder=effectivedate">startup</a> bandwagon, competition is tough.<br />
<br /> Here are India’s top 5 <keyword id="3500936" type="UNKNOWN" weightage="80" keywordseo="early-stage-investors">early stage investors</keyword>:<br />
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<em><a href="http://accel-production.s3.amazonaws.com/accel/uploads/team-member-images/be69eee58d7945ee8e3485224966da9a/Shekhar%20Kirani.jpg.1050x1070_q95_box-282,0,1460,1200_crop_detail_upscale.jpg">Image Source</a></em><br />

Planning a Startup? Here are India's Top 5 Early Stage Investors

<p><strong><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Oscar</span></p><p class="caption">Oscar CEO and co-founder Mario Schlosser, co-founders Kevin Nazemi and Joshua Kushner. The company had the largest US funding round in the period.</p></div><p></p></div></div></strong></p><ul><li><strong>CB Insights: $5.4 billion raised by fintech companies globally in the first quarter of 2018.</strong></li><li><strong>Deal activity hit a record high in the US but slumped to a five-quarter low in Europe.</strong></li></ul><p><br />LONDON - Global fintech funding hit a new quarterly record at the start of 2018, according to venture capital industry tracker CB Insights.</p><p>VC-backed fintech companies raised $5.4 billion across 323 deals globally in the first quarter, according to CB Insight's latest fintech report, released on Monday.</p><p>The figures were supported by a big uptick in deal-making activity in the US. US fintechs raised $2.1 billion across 147 deals. Notable investments include a <a href="http://uk.businessinsider.com/oscar-health-secures-165-million-funding-round-2018-3">$165 million funding round for insurance startup Oscar in March</a> and a <a href="http://uk.businessinsider.com/collective-health-raises-110-million-2018-2">$110 million capital injection for San Francisco's Collective Health in February.</a><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.cbinsights.com/research/report/fintech-trends-q1-2018/">CB Insights</a></span></p></div><p></p></div></div>While deal activity spiked in the US and Asia, it fell to a 5-quarter low in Europe with just 63 first quarter deals.</p><p>The slump was largely down to a decline in early-stage funding deals and came despite several $100 million-plus funding rounds for <a href="http://uk.businessinsider.com/fintech-bank-n26-raises-160-million-from-allianz-x-and-tencent-2018-3">European challenger banks N26</a> and Atom. European fintechs raised $933 million in the first quarter.</p><p>Funding for startups dealing with financial regulation, wealth management, and challenger banks rose, while funding for alternative lenders dropped. CB Insights said European regulation such as MIFID II, PSD2, and the upcoming GDPR were boosting financial regulation startups.</p><p class="tagline"><a href="http://www.businessinsider.com/intelligence/future-of-zelle-venmo-and-p2p-payments?IR=T&amp;utm_source=businessinsider&amp;utm_medium=ctgr&amp;utm_term=ctgr_leadgen&amp;utm_content=payments_ctgr_leadgen&amp;utm_campaign=payments_ctgr_leadgen_future-of-zelle"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/shift-from-growth-to-value-could-signal-the-end-of-the-bull-cycle-2018-4">There's a major shift occurring that could signal the end of the historic bull market</a></h3>        <div>                    </div>    </div>

US fintech funding boomed at the start of 2018 - but early-stage funding is drying up in Europe

<em><sup>(Image source- TnH Global)</sup></em><br /><br /><ul><li><strong>In the last month or so, India’s <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">Income Tax</keyword> Department has issued notices to around 150 <keyword id="1397791" type="PERSON" weightage="20" keywordseo="early-stage">early-stage</keyword> startups requiring them to reconcile outstanding taxes on the angel funds they have received.<br /></strong></li><li><strong>As per the <keyword id="6406536" type="UNKNOWN" weightage="20" keywordseo="Angel-Tax">angel tax</keyword> policy, startups have to pay a 30.9% tax on the positive difference between their valuation post-investment and their FMV, which is classified as “income from other sources.”<br /></strong></li><li><strong>Following a wave of backlash over this policy, Suresh Prabhu, the Minister of Commerce and Industry, tweeted that the <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword> had “taken up the issue”. The Central Board of Direct Taxation is currently said to be looking into the matter. </strong></li></ul>In the last month or so, India’s Income Tax Department has issued notices to <a href="https://www.bloombergquint.com/technology/indian-startup-founders-lose-sleep-over-angel-tax">around 150 early-stage startups</a>, requiring them to reconcile outstanding taxes on the angel funds they have received. <br /><br />The so-called “angel tax” applies to <keyword id="138263" type="PERSON" weightage="20" keywordseo="startup">startup</keyword>s incorporated before 2016. It relates to the discrepancy between the valuation of a startup, once it receives angel investments, and it’s actual “fair market value” (FMV). Income tax officials calculate the FMV using traditional methods such as the discounted cash flow model that doesn’t take into account intangible assets like “goodwill” and therefore, undervalues the company.<br /><br />As per the policy, startups have to pay a 30.9% tax on the positive difference between their valuation post-investment and their FMV, which is classified as “income from other sources.” Startups incorporated after 2016 under the government’s <a href="https://www.startupindia.gov.in/">Startup India programme</a> are exempt from the tax. <br /><br />Following a wave of backlash over this policy, Suresh Prabhu, India’s Minister of Commerce and Industry, <a href="https://twitter.com/sureshpprabhu/status/1075057424954843137">tweeted</a> on 19 December that the government had “taken up the issue.” The Central Board of Direct Taxation is currently said to be looking into the matter. <br /><br />Prabhu was directly responding to a link to <a href="https://entrackr.com/2018/12/draconian-angel-tax-torture-startups/">an article </a>shared by Mohandas Pai, the chairman of Manipal Global Education, that referred to the taxation policy as “draconian” and a hindrance to innovation. <br /><br />However, the Income Tax Department has maintained that it has only sent notices to companies with financial irregularities since the tax is geared towards <a href="https://www.livemint.com/Companies/hiAMmBRlIu7HxLyulkG6sK/Government-says-genuine-investments-in-startups-will-not-be.html">preventing money laundering </a>and payments to politicians in the form of shares in these unlisted companies. <br /><br />The angel tax has reportedly deterred angel <keyword id="6359051" type="UNKNOWN" weightage="20" keywordseo="investors">investors</keyword> from infusing funds into startups for fear of losing a significant chunk of their investment to the taxman. Entrepreneurs and investors had been hoping for a revision of the policy in the Indian government’s Union Budget for 2018-19 but it didn’t come to pass.<br /><br />A modicum of relief came in April this year when the government excluded startups from the angel tax in the event that the funds raised from angel investors were <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/definition-tweaked-startups-can-seek-exemption-from-angel-tax/articleshow/63741292.cms">₹100 million or less</a>, subject to the approval of an eight-member ministerial committee. <br /><br />Speaking on the tax notices issued to the 150 or so startups, an official from the Income Tax Department told <a href="https://indianexpress.com/article/business/startups/tax-notices-to-startups-have-taken-up-the-issue-says-suresh-prabhu-5501258/">the Indian Express</a> that it could pertain to those startups that aren’t registered with the <keyword id="6365809" type="UNKNOWN" weightage="20" keywordseo="commerce-ministry">commerce ministry</keyword>’s Department of Industrial Policy and Promotion (DIPP). <br /><br /><br />SEE ALSO:<br /><br /><a href="https://www.businessinsider.in/these-are-the-25-most-sought-after-startups-in-india-report/articleshow/65866420.cms">These are the 25 most sought after startups in India: Report</a><br /><br /><a href="https://www.businessinsider.in/the-youth-boardroom/the-problems-indian-startups-are-facing/videoshow/57129825.cms">The problems Indian startups are facing</a><br />

The Indian government may roll back a tax on angel investments that is said to be hurting the country’s startup ecosystem

<ul><li><keyword id="10387" type="CITY" weightage="20" keywordseo="Microsoft">Microsoft</keyword> has announced its M12 fund in India. </li><li>M12, which was launched in 2016, is a VC fund from the global tech company. </li><li>In India, Microsoft has been actively engaged with startups with accelerator programs and funding.</li></ul>Tech giant Microsoft has launched M12 its early-stage venture capital fund, in India. <br /><br />The M12 fund was launched globally in 2016 but was initially called Microsoft Ventures. In 2018, the fund was rebranded as M12. It has over 75 companies in its portfolio, globally.<br /><br />"The introduction of M12, Microsoft's venture fund in India will create new value for startups, venture capitals and the company itself to maintain the pace and direction of innovation," Microsoft India president Anant Maheshwari<a href="https://www.moneycontrol.com/news/business/microsoft-underscores-its-commitment-to-the-indian-startup-ecosystem-4131411.html"> said</a>.<br /><br />This fund comprises of experienced VCs and Microsoft veterans who won’t just be putting money in a startup, but will also add value. <br /><br />“The portfolio development team at M12 is specifically built to support and scale companies by leveraging the expansive resources of Microsoft,” the company said.<br /><br />Microsoft has long been involved in the Indian startup ecosystem. The company’s initiative <keyword id="6325416" type="UNKNOWN" weightage="20" keywordseo="Microsoft-for-Startups">Microsoft for Startups</keyword> has an accelerator program called – Microsoft ScaleUp. <br /><br />The program which is meant for seed stage or Series A funded B2B tech-enabled startups, was launched in February 2018. It helped startups crack over 120 co-sell deals, where they can co-sell with Microsoft sales teams. <br />

Microsoft launches early stage fund to ‘keep pace with Indian innovation’

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Flickr/Nguyen Hung Vu</span></p></div><p></p></div></div><em><keyword id="53346" type="POSITION" weightage="100" keywordseo="CFO">CFO</keyword> Insider is a daily newsletter from Business Insider that delivers the top news and commentary for chief financial officers and other finance experts.</em></p><p><strong><a href="http://blogs.wsj.com/cfo/2015/11/18/choose-early-stage-funding-wisely-tenable-cfo/">Early-stage startups need to be cautious when accepting funding</a> (Wall Street Journal)</strong></p><p>Tenable Network Security CFO Steve Vintz wants startup founders to be smart when accepting funding from outside investors.</p><p>His company recently completed a $250 million Series B funding round, but before they accepted money, they made sure their investors "<span>understood technology and were "playing long ball," he tells The Wall Street Journal.</span></p><p>"It's important to get a sense of the investors' sensitivities to valuation and the time horizon for which they expect a return. Often that means an initial public offering down the line," he adds.</p><p>An IPO "gives you a currency," he tells The Journal.</p><p>It "could be a valuable currency [when] investors are so strained for growth" and profits. Sometimes the only way to create the return investors demand is through an IPO."</p><p><strong><a href="http://www.businessinsider.com/executives-talk-about-work-life-balance-2015-11">17 highly successful executives explain how they balance work and life</a> (Business Insider)</strong></p><p>The days of work-life balance are coming to an end. Millennials these days want work-life <em>integration.</em></p><p>Employees are more willing than ever to work at home, while out with friends, and during family functions. In exchange for their off-site work, employees are asking for flexible work hours, less oversight, and the ability to connect from anywhere.</p><p>Business Insider has collected 17 pieces of work-life balance and integration advice from highly successful executives.</p><p><a href="http://ww2.cfo.com/analytics/2015/10/death-digital-good-bye-finance-know/"><strong>Death by digital:</strong> <strong>Good-bye </strong></a><strong><a href="http://ww2.cfo.com/analytics/2015/10/death-digital-good-bye-finance-know/">to finance as you know it</a> (CFO.com)</strong></p><p><span>David Axson, a managing director at Accenture Strategy CFO &amp; Enterprise Value, argues that the finance department is undergoing a major transformative shift. </span></p><p>"Accenture analysis shows that by 2020, cross-functional integrated teams will deliver 80% of traditional finance services. Finance-staff productivity will increase by two to three times. As a bonus, the finance organization's costs will decline by 40%," he writes for CFO.com</p><p>Axson says process-focused finance models are being replaced by digital technologies. </p><p><span>"Traditional finance components - transaction processing; control and risk management; and reporting, analytics, and forecasting - are getting reconfigured. In the process, finance is elevated to the insight engine for the business, composed of three essential elements," he tells CFO.com </span></p><p><span>Axson outlines exactly which systems are being replaced while painting a vivid picture for the future of the finance function. </span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/woman-at-trump-rally-reads-book-about-racism-2015-11">This woman got a prime seat at a Trump rally, and spent the whole time reading a book about racism</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="d0NjlzeDozqnFmnzLKO5jnoBn4lhJESs" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Early-stage startups need to be cautious when accepting funding

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Jay Z's entertainment company is adding startup investing to its repertoire. </p><p>Roc Nation, which Jay Z founded along with Jay Brown in 2008, is launching a "startup platform" called Arrive to invest in early-stage startups and help those companies build their brands. </p><p>New York-based venture capital firm Primary Venture Partners will be serving as a venture advisor to the fund and GlassBridge Asset Management will be providing "institutional and operational support."</p><p><span>There's no word yet on the size of the fund. </span></p><p>The news that Jay Z - whose real name is Shawn Carter - and Brown were planning to <a href="http://www.businessinsider.com/jay-z-launches-venture-capital-firm-2017-2" target="_blank">launch a venture fund</a> was originally<a href="https://www.axios.com/jay-z-is-launching-a-vc-fund-2276155599.html" target="_blank"> reported by Axios' Dan Primack</a> last month.</p><p>With Arrive, Roc Nation plans to offer a slew of startup services beyond capital investments, and there are further plans to launch a later-stage fund in the future. Roc Nation also plans to expand its "social impact investing" later this year. </p><p>Carter has been investing in tech startups since at least 2012. Both Carter and Brown invested in Uber's Series B, according to Axios, and Carter has invested in three other startups: the high-tech-luggage maker <a href="http://www.businessinsider.com/away-suitcase-with-phone-charger-photos-2017-1" target="_blank">Away</a>, the nail-parlor company Julep, and the private-jet startup <a href="http://www.businessinsider.com/private-travel-startup-jetsmarter-raised-20-million-from-jay-z-and-saudi-royal-family-2015-7" target="_blank">JetSmarter</a>.</p><p>Carter is also the co-owner of the <a href="http://www.businessinsider.com/sprint-buys-stake-in-tidal-2017-1" target="_blank">music-streaming service Tidal</a>.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/drone-video-apple-park-spaceship-campus-april-2017-2">Apple just released this beautiful drone video of its new 'spaceship' campus</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="g4OWR4OTE6fu-m7lIxDDuL3oibVKPSqQ" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Jay Z's Roc Nation is launching a venture fund to invest in early-stage startups

<ul><li><keyword id="68884" type="ORGANIZATION" weightage="20" keywordseo="Telangana">Telangana</keyword> government and <keyword id="6354480" type="UNKNOWN" weightage="20" keywordseo="t-hub">T-Hub</keyword> announce T-Angel, a <keyword id="6357455" type="UNKNOWN" weightage="20" keywordseo="Funding">funding</keyword> programme for <keyword id="6362513" type="UNKNOWN" weightage="20" keywordseo="startups">startups</keyword>. </li><li>30 startups from the sectors of healthcare, real estate, entertainment, sports, education and finance will be selected. </li><li>The top 10 startups from the batch will receive funding.</li></ul>The Telangana government joined hands with innovation centre T-Hub to launch a programme called T-Angel. <br /><br />T-Angel will select 30 early stage startups across healthcare, real estate, entertainment, sports, education and finance. They will be put them through a three-month acceleration programme, and the top 10 startups of the batch will receive funding. With four such programmes in a year, T-Hub aims to fund 40 startups. <br /><br />T-Angel is only the first in a series of funding programmes by Telangana to boost investments. <br /><br />“Over the last three years, the Telangana government has been constantly building the right elements to create an ecosystem for startups that allows them to scale with speed. The quantum of funds received by startups in Telangana has grown significantly too, we now see this only increases with the quality of startups the state has gathered,” said Jayesh Ranjan, Principal Secretary Industries and IT, Telangana State.<br /><br />T-Hub which is a public-private partnership runs accelerator programmes with many companies, including social media giant Facebook. Through bootcamps and workshops, T-Hub will also ensure that a startup is <keyword id="6355120" type="UNKNOWN" weightage="20" keywordseo="investment">investment</keyword> ready, by providing access to investment partners. <br /><br />Hyderabad which was formerly known for its IT sector, is also pushing for growth in innovation centers and startups. Bigwigs like Amazon, Apple, Microsoft have set-up their India offices in the city. <br />

Telangana government and T-Hub announce a new funding program for early stage startups

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Brendan McDermid/Reuters</span></p><p class="caption">SoftBank CEO Masayoshi Son with US President Donald Trump.</p></div><p></p></div></div></p><ul><li><strong>There's been a drop-off in global early-stage startup funding over the past year, according to a report from Delta Partners.</strong></li><li><strong>That's partly down to the rise of corporate venture funds, which are putting more money into "big bets" such as Uber and office sharing company WeWork.</strong></li><li><strong>SoftBank has been the biggest driver of this trend with its $100 billion Vision Fund.</strong></li><li><strong>Early-stage startups are finding it tougher to raise money as funders become more risk-averse.</strong></li></ul><p><br />When Business Insider recently asked one prominent European fund manager what he thought about SoftBank, he raised his eyebrows and said: "It's a spaceship."</p><p>The Japanese telecoms giant, and specifically its $100 billion (£71 billion) Vision Fund, has rewritten the rules of venture capital over the past 12 months, and investors and startups are still adjusting.</p><p>The Vision Fund is essentially a gigantic corporate venture fund that drops huge amounts of money into both well-established tech firms and promising startups. The amount of money it has at its disposal is unprecedented, and has shifted the dynamics of venture funding around the world.</p><p><a href="https://www.reuters.com/article/us-uber-softbank-tender/softbank-is-now-ubers-largest-shareholder-as-deal-closes-idUSKBN1F72WL">SoftBank has taken an 17.5% stake in Uber</a>, and <a href="http://uk.businessinsider.com/uk-simulation-startup-improbable-raises-502-million-softbank-minority-stake-2017-5">dropped $502 million into Improbable</a>, a UK gaming software firm. It's also active in Asia, with a stake in Indian Uber rival Ola.</p><p>According to a new report from tech consultancy Delta Partners, seen by Business Insider, SoftBank kickstarted a trend last year of funding mega-rounds - which benefited late-stage companies but put a serious squeeze on seed-stage financing.</p><p>In other words, it became a lot harder for early startups to raise funding.</p><p><strong>Here's a chart - you can see the global number of deals in 2017 was down, with particular impact on the seed stage. That means early-stage startups found it tougher to raise venture funding.</strong></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Delta Partners</span></p></div><p></p></div></div></p><p><strong>And here's another set of charts showing that growth-stage companies are getting a bigger piece of the funding pie:</strong></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Delta Partners</span></p></div><p></p></div></div></p><p>The data reflects real-world worries around early-stage funding.</p><p>Young startups are a naturally risky place to put your money - they're not making much revenue, and maybe haven't worked out whether there's even much demand for whatever they are building. Unsurprisingly, investors are averse to that risk, so it falls to specialist early-stage funds and individual angel investors to get these firms going.</p><p>One British seed investor told Business Insider this week that, <a href="http://uk.businessinsider.com/uk-economy-q4-gdp-brexit-2018-3">with the UK's economy lagging</a>, there's anecdotal evidence to suggest angels are putting their money somewhere other than startups. And the crash in early-stage funding clearly isn't just limited to the UK, as shown by Delta Partners' data <a href="https://www.reuters.com/article/us-venture-seedfunding/seed-funding-slows-in-silicon-valley-idUSKBN1AH31J">and other reports.</a></p><p>SoftBank, and the rise of big corporate funds, points to a trend of more money going into dominant players, such as Uber and office-sharing company WeWork, who might "win" their entire market. They represent a safer bet - if anything in tech can be considered safe.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Delta Partners</span></p></div><p></p></div></div></p><p>Delta Partners predicted in its report that early stage funding will recover, and that Asia and Europe will have a role to play here. But it looks like the megafunds and their megarounds are here to stay.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/ultra-light-diving-system-scuba-accessible-to-anyone-nomad-brownies-marine-group-blu3-2018-3">This ultra-light diving system makes scuba accessible to anyone - here's how it works</a></h3>        <div>                    </div>    </div>

SoftBank's $100 billion mega-fund made it much harder for young tech startups to raise finance - here's why

<ul class="summary-list"><li>The number of fintech funding rounds above $100 million reached a record high in 2019, according to a <a href="https://www.cbinsights.com/research/report/fintech-trends-q4-2019/">report from CB Insights</a> published Wednesday.</li><li>There were 83 mega-rounds that totaled $17.2 billion in 2019, representing nearly half of the $34.5 billion raised by fintechs last year. </li><li>The focus on larger, later-stage rounds is a nod to the maturation of a market that wasn't even <a href="https://www.businessinsider.com/what-is-a-fintech-wall-street-technology-finance-2020-1">widely recognized a decade ago</a>. Once viewed as scrappy competitors to the traditional players, fintechs have represented a real threat to how established firms across financial services do business. </li><li>At least one big exit in the fintech space for a unicorn has already been announced. Plaid, the startup that serves as the link between fintechs and their customers' bank accounts, is set to be acquired by <a href="https://www.businessinsider.com/visa-buy-plaid-for-53-billion-2020-1">Visa for $5.3 billion</a>.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Click here for more BI Prime stories.</a></li></ul><p>Fintech investing reached a tipping point in 2019, as nearly half the funding in the sector went towards mega-rounds.</p><p>That shift shows how the fintech space is maturing, and comes as some individual startups have nabbed eye-popping valuations. </p><p><a href="https://www.cbinsights.com/research/report/fintech-trends-q4-2019/">A report by CB Insights</a> published on Wednesday of investments made into fintechs in 2019 found that funding rounds of more than $100 million accounted for almost half of the total $34.5 billion raised.</p><p>Of the 1,913 funding and deals done in 2019, 83 were categorized as mega-rounds, accounting for $17.2 billion. In North America alone there were 47 mega-rounds, nearly double what the region had the previous year. Meanwhile, early-stage deals (meaning seed/angel and Series A) dropped to a 12-quarter low in 2019's fourth quarter.</p><p>Fintech funding in 2019 fell short of the $40.8 billion the sector attracted in 2018 by 15%.  But that was mainly because China's Ant Financial raised a record $14 billion in 2018. Removing that round would make 2019 a record funding year, CB Insights said.</p><p>The focus on larger, later-stage rounds is a nod to the maturation of a market that wasn't even <a href="https://www.businessinsider.com/what-is-a-fintech-wall-street-technology-finance-2020-1">widely recognized a decade ago</a>. Once viewed as scrappy competitors to the traditional players, fintechs have represented a real threat to how established firms across financial services do business. </p><p>As a result, many of the legacy players have looked to establish relationships with them, either through investments, as a customer, or by strategic partnerships. </p><p>Doing so has validated fintechs' efforts, and helped their valuations climb.</p><p>According to the report, there are 66 fintech unicorns (startups valued at $1 billion or more). The elite group holds a total valuation of $243.6 billion. </p><p>But as companies' valuations continue to climb to record highs, the question of possible landing spots for unicorn fintechs is also coming into focus.  </p><p>The public markets proved a difficult environment for <a href="https://markets.businessinsider.com/news/stocks/best-ipos-of-2019-performance-every-1-billion-plus-offering-2019-10-1028577600">high-profile IPOs in 2019</a>. The challenges companies have faced after listing further highlight the disconnect between <a href="https://markets.businessinsider.com/news/stocks/ipo-market-outlook-trends-why-investors-rebelling-against-unicorns-implications-2019-9-1028570687">private valuations and public markets.</a></p><p><a href="https://www.businessinsider.com/robo-advisors-wealthfront-betterment-attract-assets-2020-1">In December</a>, Jason Gurandiano, global head of financial technology investment banking at RBC, spoke to Business Insider about how some consumer-facing fintechs are in a difficult spot. </p><p>"They're still fiercely independent, and there's no catalyst to force them to merge," he said. "They're well funded. They're well-capitalized. They're growing. They really haven't hit that wall yet where they go, 'We've got to do something here.'" </p><p>To be sure, at least one big exit in the fintech space for a unicorn has already been announced. Plaid, the startup that serves as the link between fintechs and their customers' bank accounts, is set to be acquired by <a href="https://www.businessinsider.com/visa-buy-plaid-for-53-billion-2020-1">Visa for $5.3 billion</a>.</p><p>The deal, which was announced in January, could signal more to come in terms of traditional players looking to acquire upstarts in their space. But how those marriages work out in practice remains to be seen.</p><p>In a call announcing the deal, Visa's chairman and CEO, Al Kelly, indicated it might need to <a href="https://www.businessinsider.com/visa-ceo-mentions-wall-streets-concerns-over-plaid-2020-1">adjust how Plaid operates</a>.</p><p>"We know there are financial institutions who would prefer Plaid operate differently in some cases," he said. "We intend to address those concerns while not diminishing the value for developers."</p>

Early-stage fintech funding plunged in 2019 as investors poured big money into growth-stage startups to the tune of $17.2 billion

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">A scientist works at Zai Lab's drug development facility in Shanghai, China October 18, 2017.</p></div><p></p></div></div></p><ul><li><strong>Money is flowing into biotech startups, with companies more and more frequently raising more than $100 million in early-stage funding rounds. </strong></li><li><strong>We asked venture capitalists what all this capital means for the private biotech industry. </strong></li><li><strong>Some were excited for the <keyword id="41551" type="ENTERTAINMENT" weightage="100" keywordseo="science">science</keyword>, while concerned about the expectations that come along with this greater funding, while others are finding ways to look past the hype. </strong></li></ul><p><br />Over the past few years, biotech startups have been successful at raising large amounts of capital just as they're starting out. It's led to a lot of <a href="http://www.businessinsider.com/healthcare-and-biotech-unicorns-to-watch-2018-1">unicorns,</a> with multi-billion-dollar valued companies having raised hundreds of millions in their series A or B rounds.</p><p>But it begs the question: Is all this money flowing into biotech so early on a good thing?</p><p>On a recent trip to San Francisco, Business Insider posed this question to venture capitalists. For the most part, there was a sense of excitement about the money itself flowing into the industry, mixed with concern that expectations might be set too high. </p><p>"I think we are in a situation, which for companies is seemingly positive, where we have a lot of capital being put to work and a lot of capital sources coming into the U," Carol Gallagher, a partner at New Enterprise Associates, told Business Insider.</p><p>"I think history would tell us that at some point there can be too much capital and it's not really discerning, and so then what happens is companies get funded and maybe take longer, or don't actually have the right team or right science and get funded anyway, and there's a disappointment."</p><h2><strong>A new inflection point</strong></h2><p>One reason startups could be raising more money earlier in their existence, according to Gallagher, could be because it's taking longer to get to the point where investors are willing to fund the company even more. Instead of getting funding after, say, bringing a drug into animal trials, companies now need to get to the point where the treatment's tested in humans in order to get more funding needed to run those trials. </p><p>"The larger size of the series A is coming more from this realization that there just really isn't a value inflection that's very significant ahead of the actual clinical proof of concept," Gallagher said. That's because at an earlier stage where the treatment is being tested in animals, there's still a good chance that the treatment might not work in humans.</p><p>"I think that one of the biggest challenges for our industry will be that we just aren't that good at being predictive," she said. </p><p>Jon Norris, managing director for Silicon Valley Bank's healthcare practice, told Business Insider that oftentimes while the round number might look quite large, the deals are tranched, meaning that the round may be for $75 million, but initially the company may get a fraction of that. As the company progresses through development, they may start to get more.  </p><h2>Betting on more multi-billion dollar biotechs </h2><p>Alexis Borisy, a partner at Third Rock Ventures, said that the reason some companies are raising larger funding rounds early on may have more to do with what the company is trying to develop.</p><p>"I think the question is more, 'What is the company trying to build? What is the fundamental innovation?' and 'What's the right amount of capital to assemble the right team, build the right culture, go deploy what you're doing in that field of science and medicine to the point where you are really going to be doing something?'" Borisy said. </p><p>The number of biotech startups he sees launch in any given year hasn't grown, he said. The same is true for the number of billion-dollar exits he's seen that would validate a large amount of funding so early on. For the amount of funding going in at an early stage to pan out, there would need to be more multi-billion-dollar companies resulting from it for it to benefit investors. </p><p>"There's a lot of capital in this space, which is great I think for patients," Borisy said. "I think it's great returns for society. As far as, will all that money have great financial returns, the general math would suggest that it's probably not going to be true."</p><h2>Avoiding hype</h2><p>In some cases, certain startups have just been overhyped to their sky-high valuations.  In those instances, venture capitalists, including those in corporate venture arms, have to pass their own judgment.</p><p>"Are we going to try to compete with those? Probably not, because we're not going to believe the valuations, we'll do our own calculations, because if we're going to overpay for the valuation then we know we will have to take a P&amp;L hit," Tom Heyman, president of J&amp;J's Development Corporation, the oldest life sciences corporate venture fund, told Business Insider. </p><p>That requires some restraint to wait on the sidelines.</p><p>"There's a discipline that says we're not going to be a momentum players, we're not going to follow the hype of celebrity," Gallagher said.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/stretching-before-after-workout-explained-2016-12">An exercise scientist explains what everyone gets wrong about stretching</a></h3>        <div>                    </div>    </div>

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