The FinTech sector has attracted record levels of investment this year, according to KPMG’s fintech pulse, a semi-annual report on investment trends in FinTech.
The report, which examines investment trends in FinTech, found that oAll global fintech financing in M&A, private equity and venture capital operations reached a new high in H1’21, rising from $ 87.1 billion in H2’20 to 98 billion dollars in H1’21. It was also found that liquidity reserves, diversification of poles and sub-sectors and high levels of activity around the world contributed to performance.
Fintech valuations remained very high in H1’21 and led to the creation of 163 startups worth at least $ 1 billion, or unicorns, in the first half of the year. Firms have been particularly active in venture capital transactions, participating in nearly $ 21 billion in investments across nearly 600 deals around the world, with many realizing that it is faster to do so by partnering, by investing in or acquiring fintechs.
“Global fintech investment hit an all-time high in the first half of 2021, with investors, especially businesses and venture capitalists, making big bets on market leaders in many and almost all jurisdictions sub-sectors, “said Ian Pollari, Global Co-Head of Fintech at KPMG. “The big rounds, high valuations and successful exits underscore the thesis that digital customer engagement that has accelerated during the pandemic is here to stay.”
In prospect for the rest of 2021
Total fintech investment in H2’21 is expected to remain very robust in most regions of the world. Revenue-based finance solutions, bank-as-a-service models and B2B services are expected to attract increasing levels of investment, while the payments space is expected to remain a dominant driver of fintech investment.
As there is an increase in digital transactions, which has led to an increase in cyber attacks and ransomware, cybersecurity solutions are also likely to be very present on the radar of investors.
“Fintech is an incredibly hot investment area right now – and that shouldn’t change anytime soon given the growing number of fintech centers attracting investment and the growing size and valuation of deals,” said Anton Ruddenklau, Global Co-Head of Fintech at KPMG. “As we head into S2’21, we expect more consolidation to occur, especially in mature fintech areas, as fintechs seek to become the dominant player in the market, whether at the level. regional or global. “
- Global investments in FinTech reached US $ 98 billion out of 2,456 deals in the first half of 21, surpassing the annual total of US $ 121.5 billion out of 3,520 deals last year.
- Mergers and acquisitions continued at a strong pace, accounting for $ 40.7 billion out of 353 deals in the first half of 21, compared to $ 74 billion out of 502 deals in 2020 as a whole.
- Valuations for late-stage companies more than doubled year-over-year, with global pre-money median valuations for late-stage transactions rising from $ 135 million in 2020 to $ 325 million in end of first semester 21.
- Firm participation in fintech venture capital investments was incredibly strong in the first half of 21, with $ 20.8 billion invested globally. The Americas (US $ 13 billion) and the EMEA region (US $ 5 billion) recorded record levels of CVC-affiliated investments.
- Global cybersecurity investment hit a new annual record mid-year, rising from US $ 2.2 billion in 2020 to over US $ 3.7 billion in H1’21.
- Total investment in FinTech in the Americas has been very strong with over $ 51 billion invested in 1,188 deals.
- The EMEA region recorded $ 39.1 billion in fintech investments in the first half of 21, including a record $ 15.1 billion in venture capital funding.
- Fintech investments in the Asia-Pacific region continued at a more moderate pace, reaching $ 7.5 billion out of 467 deals, up from $ 13.4 billion out of 714 deals in all of 2020.