Israel Fintech Sector Witnesses Strong Funding Figures in 2021

Fintech startups received 17% of Israeli tech investments.

Fintech companies accounted for 23% of all Israeli IPOs and SPAC mergers in 2020 and 2021.

The surge implied a 136% increase from 2020, where fintech startups and firms experienced $1.9 billion in funding.

Among the companies that raised significant funding in 2021 were Melio, which developed a payment platform for small and medium-sized businesses, with a Series D round of $250 million, as well as Tipalti, which developed a payments and compliance software platform with a $270 million investment and HoneyBook, which raised $250 million in a Series E round in late 2021 as well as $155 million earlier.

Fintech funding accounted for 17% of the total investments in Israeli tech companies, the highest figure in six years, with single investments over $100 million, driving ‘the lion’s share of growth in the fintech space, the authors write. Moreover, over $3 billion of the total funding was raised in mega rounds in 2021.

Investments by Segments

Fintech companies accounted for 23% of all IPOs and SPAC mergers for Israeli companies in 2020 and 2021 combined. Among them are Payoneer, a payment processing company that went public on the New York Stock Exchange last summer, Riskified, an e-commerce fraud prevention company that went public on the New York Stock Exchange in July, and insurtech companies Hippo and Lemonade.

The fastest-growing fintech segments, according to the report, were insurtech, payments, trading and investing, and lending and financing.

Despite this, cryptocurrency and blockchain-based security technologies were the segments with the highest traction. However, these emerging fields inspire reluctance in traditional investors due to the lack of transparency and regulation.