Total global investment in fintech decreased from $62.3 billion across 2,287 deals in the second half of 2023 to $51.9 billion across 2,255 deals in the first half of 2024.
According to data compiled by KPMG, venture capital investment declined across all major regions. The Americas experienced a slight drop from $38.5 billion to $36.7 billion, while Apac saw a reduction from $4.6 billion to $3.7 billion. In contrast, the EMEA region faced a more significant decline, falling from $19.1 billion to $11.4 billion.
Interestingly, the UK emerged as an outlier, with fintech investment tripling due to several major funding rounds and buyouts. Total UK fintech investment reached $7.3 billion over the six-month period, a substantial increase from $2.5 billion in the prior half.
Karim Haji, global head of financial services at KPMG International, commented, “The high cost of capital and geopolitical uncertainty linked to conflicts and elections have significantly impacted global investments this year, and the fintech market is no exception. Investors are proceeding cautiously, particularly with large transactions on the M&A front, due to concerns over valuations and the profitability of potential targets. Instead, their focus has shifted to enhancing the companies they already hold, rather than pursuing new acquisitions.”
Looking ahead, fintech investment is expected to remain subdued in the second half of 2024, influenced by the prevailing high interest rates and the ensuing cost of capital, along with the upcoming US presidential election. While there is some optimism that deal volume may continue to rise, average deal sizes are likely to remain modest compared to historical trends, according to Haji.