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Fintech investment hits $98bn in H1, KPMG finds

Overall global fintech funding across M&A, PE, and VC deals soared to a new high in the first half of 2021

KPMG’s bi-annual report on fintech investment trends found that global funding for the sector has reached a “record high” in the first half of this year, with VCs more than doubling from $22.5bn (£16.2bn) to $52.3bn (£37.7bn) in a six-month period.

It attributed this increase to dry powder cash reserves that have reportedly increased diversification in hubs and subsectors, as well as “strong” activity across the world.

The US saw a relatively modest VC investment increase from $22bn (£15.8bn) to $25bn (£18bn), while investment in the Americas more broadly increased from $7bn (£7bn). KPMG said that continued innovations in financial technology, combined with the “dramatic” increase in use of digital offerings has made fintech one of the most active sectors of investment for this area.

Meanwhile, Europe also witnessed a “dramatic” increase overall in its fintech sector, growing by $13bn (£9.3bn), which was primarily led by the UK’s investment of $24.5bn (£17.6bn).

Asia-Pacific investment rebounded from its low performing $4.7bn (£3.3bn) back up to $7.5bn (£5.4bn) for the end of the first half of the year. In addition, India, China and Australia led the way for major fintech investment in the region.

Commenting on the findings, Ian Pollari, KPMG’s global fintech co-lead, stated: “Large funding rounds, high valuations and successful exits underscore the thesis that digital engagement of customers that accelerated during the pandemic is here to stay.”

Looking forward to the second half of 2021, total fintech investment is expected to remain “very robust” in most regions of the world.

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