January 1, 2021
2020 was a wretched year by every measure except this one: 46 Boston-based fintech firms raised more than $1.12 billion in private equity and venture capital — significantly more than any previous year except 2018 (the year SoftBank dropped $500 million on Cambridge Mobile Telematics). In addition, Duck Creek collected $405 million in an August IPO, so total capital raised in the region far exceeded any other previous year’s.
I track roughly 165 active fintech (insurtech, regtech, etc.) startups headquartered in Greater Boston which, by my definition, runs from Portland to Providence and as far west as Springfield. About 26% brought in additional capital last year. This, too, was better than recent years both in number of active startups and investment activity.
The largest venture funding round of the year was for Toast for the second year running, this time $400 million raised in February, before everything went to hell for the restaurant industry. That’s on top of $250 million raised last year. Other big rounds include $230 million raised by Duck Creek right before its IPO and $120 million raised by Flywire.
Here are the 2020 financing events I tallied:
|Duck Creek Technologies||$ 230,000,000|
|Sovos Compliance||$ 31,252,105|
|Hi Marley||$ 8,000,000|
|Coin Metrics||$ 6,000,000|
|Digital Onboarding||$ 3,000,000|
|Knox Financial||$ 3,000,000|
|Stride Funding||$ 2,138,966|
|Volos Portfolio Solutions||$ 1,300,000|
|Everyday Life||$ 705,000|
|Lumint Currency Management||$ 575,000|
|Raise Green||$ 175,000|
|OneShield Software||$ ?|
|Surround Insurance||$ ?|
OneShield Software, a provider of software to specialty, property and casualty insurance companies, raised capital for the first time in nearly 20 years. The round’s size and composition were undisclosed but since it was led by Bain Capital Credit, we’ll assume a good chunk of it was debt. Stavvy’s 2020 raise was debt as was Ciginifi’s. We don’t know the details of Surround Insurance’s 2020 fundraising success, but we are the first to report that it has raised $2.5 million to date.
Tiger Global Management, Obvious Ventures, Gradient Ventures, and Techstars all invested in multiple local fintechs during the year.
There were several notable exits via M&A. Airfox was acquired by Brazilian retail giant Via Varejo in May. HealthEdge was acquired by Blackstone’s growth equity unit in July. Terms were not disclosed but estimated at approximately $700 million. (HealthEdge was also an acquirer during the year, buying two firms from outside the region.)
Also in July, Sam Fang finally pulled the trigger, selling Delphi Technology to Sapiens for $19 million in cash. Developed by former Oracle execs, Delphi became a leading provider of software and services to the medical malpractice insurance industry. Sam flirted with bringing on a private equity partner several times over the years but never did.
Netcapital sold to ValueSetter for $20MM in stock in August. Upserve, the restaurant data and payments firm that started life as Swipely, sold to Lightspeed for $430 million in cash and stock in December. 55ip was acquired by JP Morgan for an undisclosed sum also in December.
I rarely hear when startups shut down, and I’m put in mind of Monty Python and the Holy Grail each time I list a startup as dead, but Quantopian was so well known that its closing made news in November.
I am certain to have missed some funding events and exits and to be unaware of some stealthy startups. My sources of data include, in order of authority: Edgar, reputable publications, CrunchBase, disreputable publications, rumor, speculation, and the Federal Security Service subsidiary known as Facebook. Please be in touch if you are aware of any startups, funding events, exits, or closures I have missed.
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