Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
KPMG Fintech Pulse H1’22 Report: Global Fintech Investments $107.8B across 2,980 Deals
KPMG | Sep 2022
- Global investment in fintech falls to $107.8 billion despite robust VC funding
- Global investment in fintech fell from $111.2 billion across 3,372 deals in H1’22 to $107.8 billion across 2,980 deals in H1’21, mirroring the decline in investment experienced in the broader technology sector.
- Total fintech investment and deals volume declined in both the Americas and EMEA regions, while the Asia-Pacific region attracted a new annual high of fintech investment amidst a decline in the number of deals.
- US attracts vast majority of fintech investment in Americas
- The US accounted for $34.9 billion of fintech investment in the Americas during H1’22, a drop from $49.7 billion in H2’22. Fintech investment outside of the US dropped even more prodigiously in the wake of the rapid rise in global geopolitical and macroeconomic uncertainty.
- Brazil and Canada seeing declines in investment greater than 50 percent between H2’21 and H1’22. Brazil saw fintech investment drop from $3.7 billion to $1.4 billion, while Canada saw investment fall from $1.9 billion to $810 million.
- Investors turning focus to profitability and cash flow
- Given rising interest rates, increasing levels of inflation, and growing concerns about an economic recession, fintech investors across the Americas enhanced their focus on profitability, top-line revenue growth and cash flow when evaluating targets and companies within their portfolios.
See: CB Insights: Canadian Fintech Funding Dropped 70 Percent in Q2-2022 YoY
- Trends to watch for in H2’22
- Market corrections — including declining valuations, increasing M&A and a growing number of distressed businesses — in light of the predicted recession and the over-enthusiasm and over-investment in key areas over the last 18 months.
- Continued focus on embedded solutions, including payments, finance, and insurance.
- Big tech companies and other corporates prioritizing partnerships, while also looking for opportunities for add-ins at bargain prices compared to recent years.
- Growing focus on B2B solutions aimed at improvement of infrastructure or on the optimization of operational activities like AR/AP.
- Blockchain and crypto space takes hit, still sees big deals. Slowdown in crypto interest and investment, particularly retail firms offering coins, tokens and NFTs.
- Increasing focus on underdeveloped fintech markets, including jurisdictions in Africa.
- Payments space stays hot in eyes of investors in H1’22, but could taper off
- C investment in fintech remains robust as Europe sets new record
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