Global fintech investment reached US$98 billion across 2,456 deals in the first half of 202 — outpacing last year’s annual total of $121.5 billion across 3,520 deals, said KPMG recently.
M&A deals continued at a healthy pace, accounting for $40.7 billion across 353 deals in H1’21, compared to $74 billion across 502 deals during all of 2020, the company pointed out.
In Asia Pacific, Total fintech investment (M&A, VC and PE) and deals activity saw a solid rebound in the first half of 2021, according to KPMG.
After falling to $4.7 billion across 357 deals in H2’20, fintech investment in Asia Pacific hit US$7.5 billion across 467 deals in H1’21 – in large part driven by venture capital activity, the firm added.
- Late-stage venture valuations more than doubled year-over-year, with global median pre-money valuations for late stage deals rising from $135 million in 2020 to $325 million at the end of H1’21.
- Corporate participation in VC investment in fintech was incredibly strong in H1’21, with US$20.8 billion of investment globally. Both the Americas (US$13 billion) and EMEA (US$5 billion) saw record levels of CVC-affiliated investment.
- Global investment in cybersecurity reached a new annual record at mid-year—rising from US$2.2 billion in 2020 to over US$3.7 billion in H1’21.
- Cross-border M&A deal value rose dramatically, from $10.3 billion during all of 2020 to $27.7 billion in H1’21 alone.
- PE firms embraced the fintech space in H1’21, contributing $5 billion in investment to fintech— surpassing the previous annual high of $4.7 billion seen in 2018.
- Total fintech investment in the Americas was very robust with over US$51 billion in investment across 1,188 deals.
- The EMEA region saw US$39.1 billion in fintech investment in H1’21, including a record US$15.1 billion in VC funding.
Asia Pacific highlights
- India led the way with $2 billion in total fintech investment, followed by China ($1.3 billion) and Australia ($900 million).
- The top ten deals in the Asia-Pacific region reflected incredible geographic diversity in H1’21, including South Korea (toss), Indonesia (Gojek), India (Pine Labs, CRED and Razorpay and KreditBee), the Philippines (Mynt), Australia (86400) and China (MediTrust). This diversity highlights the ongoing evolution and maturation of fintech hubs across the region.
- Platform players with strong fintech offerings remained very hot in the Asia-Pacific region. Indonesia-based Gojek raised $300 million in H1’21, while also announcing a merger with payments and eCommerce platform Tokopedia.
- Given the explosion of US-based SPACs in recent months, startups—including mature fintechs— in the Asia-Pacific region are expected to see more interest from US-based SPACs over the next six months.
- During H1’21, Singapore-based super-app company Grab announced the largest SPAC merger ever: a $40 billion deal with US-based Altimeter Growth Corp, which is expected to be finalised in H2’21.
Strong outlook ahead
Looking forward to H2’21, total fintech investment is expected to remain very robust in most regions of the world, KPMG said.
While the payments space is expected to remain a dominant driver of fintech investment, revenue-based financing solutions, banking-as-a-service models, and B2B services are expected to attract increasing levels of investment, the firm noted.
Given the rise in digital transactions, and the subsequent increase in cyberattacks and ransomware, cybersecurity solutions will likely also be high on the radar of investors, KPMG predicted.
Fintech is an incredibly hot area of investment right now—and that’s not expected to change anytime soon given the increasing number of fintech hubs attracting investments and growing deal sizes and valuations, said Anton Ruddenklau, KPMG’s Global Fintech Co-Lead.
“As we head into H2’21, we anticipate more consolidation will occur, particularly in mature fintech areas as fintechs look to become the dominant market player either regionally or globally,”he noted.