Global fintech funding rose to US$111.8B in 2018, up 120 percent from US$50.8B in 2017, fueled by mega M&A and buyout deals, according to the KPMG Pulse of Fintech report.

Fintech deal volume declined markedly in the second half of 2018, but still reached 2,196 deals for the year, up from 2,165 in 2017.  Increasing geographic diversity of fintech VC funding continues to help drive deal volume, even as larger fintech hubs see more concentrated investment in larger deals.

“The growing deal sizes, higher levels of M&A activity and the geographic spread of deals all highlight the increasing maturation of the fintech sector on a global scale,” said Ian Pollari, Global Co-Lead, KPMG Fintech. “Fintech start-ups in markets as diverse as Germany and Brazil are attracting larger and later stage rounds, while the more established fintech leaders in the US, UK, and Asia are making their own investments and acquisitions in order to expand their product and geographic reach.”

In Bahrain, there have been significant initiatives taken to position Bahrain as a regional Fintech Hub. The establishment of the Regulatory Sandbox and the regulatory Framework on Open Banking are game changers which will significantly propel the Fintech ecosystem . According to Jalil AlAali, Partner and Head of Financial Services at KPMG in Bahrain “The Fintech ecosystem in Bahrain has picked up significant momentum in the last year with a sharp focus from the Government to position Bahrain as a key Fintech hub and key advancements in regulations governing Fintechs. The Open Banking regulations especially, could be a game changer.”

2018 Key Highlights

  • Mega deals drove a record US$111.8B global fintech investment in 2018, led by three US$10B+ deals, as well as an additional 14 US$1B+ M&A deals.  All told, 2018 was a year of multiple record highs across fintech investment, including VC, corporate VC, M&A and PE.
  • Fintech investment in the Americas rose from US$29B in 2017 to US$54.5B in 2018. Deals volume also increased from 1,039 deals to 1,245. The US accounted for the bulk of this funding - US$52.5B across 1,061 deals.
  • European fintech investment for 2018 increased sharply to US$34.2B from US$12.2B in 2017, thanks to massive M&A and buyout deals, including WorldPay (US$12.8B), Nets (US$5.5B), iZettle (US$2.2B), Fidessa Group (US$2.1B), and IRIS Software Group (US$1.75B).
  • The total Asia Pacific fintech investment for 2018 of US$22.7B, up from US$12.5B in 2017, was dominated by Ant Financial’s record-setting US$14B deal in Q2’18, as fintech investment in the region slowed significantly in the second half of the year.
  • Cross-border M&A rose significantly in 2018, with approximately US$53.5B invested across borders in 155 deals, up from US$18.9B in 153 cross-border deals in 2017. The US drew US$28B in cross-border M&A, while Europe attracted US$21.6B.
  • Investment flowed at a significant pace into key subsectors and technologies – regtech investment surged to US$3.7B in 2018 from US$1.2B in 2017, while investment in blockchain remained strong at US$4.5B in 2018, just off the US$4.8B in 2017. 

Fintech investment expected to remain strong in 2019 despite increasing uncertainty

While geopolitical volatility and trade concerns could put a damper on fintech investment in 2019, the strong diversity of global fintech hubs, and the strengthening of subsectors, such as regtech and insurtech, should contribute to continued growth.  AI and automation are expected to remain very hot areas of investor interest at the technology level.

-Ends-

For more information, contact:
Kent Miller
KPMG International
+1 908 313 5037
ktmiller@kpmg.com 

Afrah faraj
KPMG in Bahrain
afaraj@kpmg.com 

About KPMG Fintech
The Financial Services industry is transforming with the emergence of innovative new products, channels and business models. This wave of change is driven by evolving customer expectations, digitalization, as well as continued regulatory and cost pressures. We are passionate about supporting clients to successfully navigate this transformation, mitigating the threats and capitalizing on the opportunities. KPMG Global Fintech comprises professionals in over 50 fintech hubs around the world, working closely with financial institutions, digital banks and fintech companies, to help them understand the signals of change, identify the growth opportunities and to develop and execute on their strategic plans.

About KPMG International
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 153 countries and territories and have 207,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

© Press Release 2019

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.