Global VC investment in fintech accounts for $20 billion
According to the Pulse of Fintech H1’20 by KPMG International, overall global fintech funding fell during the first half of 2020, with $25.6 billion of investment globally across 1,221 deals, but corporate deals are driving continued strength in VC activity.
Here are some of the key findings on fintech investment globally in 2020:
- Global fintech investment is well behind 2019’s total investment of $150.4 billion. At mid-year, total fintech investment globally is $25.6 billion.
- The Americas accounted for the largest share of total fintech investment at mid-year, with a $12.9 billion investment. ASPAC saw $8.1 billion in total fintech investment during H1’20, while EMEA saw $4.6 billion in fintech investment.
- The Americas and EMEA are currently on track to see a new record annual high of VC investment in fintech. At the end of H1’20, the Americas had attracted $9.3 billion in VC investment, Asia had attracted $6.7 billion, and EMEA had attracted $4 billion.
- Corporate VC participating investment remained very strong, accounting for $12.2 billion in fintech investment globally. The US saw a record in VC deal value with corporate participation well over $2.4 billion in Q1 2020; the following quarter nearly matched that same amount.
- M&A activity dropped in all regions of the world – a sharp decline due to the mega M&A activity seen during 2018 and 2019. During H1’20, global M&A deals accounted for $4 billion globally, compared to $85.7 billion in H2’19.
- Global investment in cybersecurity flew past 2019’s record high of $592.3 million, reaching $870.8 million.
According to the study, COVID-19 will remain a key driver of change for fintech investment heading into H2’20 given the strong acceleration of digital trends – such as the use of contactless payments and the demand for and use of digital service models. The ongoing acceleration of digital trends will drive fintech investment not only in direct fintech solutions, but also in related enabling technologies – such as cybersecurity, fraud prevention, and digital identity management. Platform businesses will also continue to be a hot ticket for investors, particularly in less mature jurisdictions.