KPMG’s bi-annual Pulse of Fintech report reveals a challenging landscape for the global fintech sector in the second half of 2024, as both investment and the number of deals have declined to levels unseen since 2017.
Over the past year, the fintech industry faced difficulties, attracting just $95.6 billion in investment through 4,639 deals. A combination of factors contributed to the reduced investor enthusiasm, including macroeconomic challenges, geopolitical tensions, a year filled with elections in major regions, and ongoing concerns about valuations and the lack of exit opportunities.
The second half of 2024 experienced a slowdown compared to the first, with investments decreasing from $51.7 billion in H1 to $43.9 billion in H2. Nonetheless, a closer examination of the results reveals some signs of recovery; global fintech investment increased from $18 billion in Q3 to $25.9 billion in Q4. M&A deal value also saw growth, rising from $7.4 billion to $14.2 billion, while VC investment went from $9.7 billion to $11.2 billion in the same period.
Regionally, the Americas attracted the most fintech investment in 2024, totaling $63.8 billion across 2,267 deals, which included $50.7 billion across 1,836 deals in the US. The EMEA region followed with $20.3 billion across 1,465 deals, and the APAC region secured $11.4 billion across 896 deals. From a sector perspective, the payments space drew the largest share of investment at $31 billion, followed by digital assets and currencies at $9.1 billion, and regtech at $7.4 billion.
“It’s been a rough year for nearly everyone — fintechs, corporates, VC and PE firms — given the breadth of challenges and uncertainties in the global market,” said Karim Haji, global head of financial services at KPMG International. “With only a handful of exceptions, few were willing to pursue large deals that have historically characterized fintech investment. However, there’s reason for optimism as we approach 2025; key elections are behind us and investment activity is beginning to rebound. The recent interest rate cuts in various jurisdictions and lower funding costs could encourage more deals, though it’s essential to monitor how changing global trading conditions affect inflation and interest rates.”
While payments are expected to remain the largest investment sector globally, the report notes that digital assets and currencies are poised for growth, particularly in areas like market infrastructure, digital tokenization, and stablecoins. Additionally, artificial intelligence (AI) is projected to maintain its status as a priority for investors, with regtech and cybersecurity likely attracting significant interest in the first half of 2025.
“If the broader investment trends are any indication, AI may become a key player in fintech investment,” states Anton Ruddenklau, lead of global innovation and fintech at KPMG International. “While there’s notable interest in AI, generative AI, agentic AI, and automation, caution remains prevalent. Over the next year, AI-focused regtechs may garner the most attention from investors as financial services companies seek better strategies to navigate the increasingly complex regulatory landscape.”