The Pulse of Fintech H2 ’24 highlights a small trend inversion in 3Q24 and 4Q24 and an little increase of the targets for M&A deals and venture capital funds
The KPMG Report The Pulse of Fintech H2 ’24 (see here the press release and the full report) argued on the ground of PitchBook data that he global fintech is still facing tough times after having attracted having posted brilliand figured for m&a, private equity and venture capital in 2021 and 2022. The sector is no longer attracting the previous interest of international investors who closed deals worth 95.6 billion US Dollars in 2024 (119.8 billion in 2023, 202.9 billion in 2022 and 239.7 billion in 2021). The transactions number also went down, as market participants closed 4639 operations in 2024 (5382 in 2023, 8025 in 2022 and 8392 in 2021).
The report also highlights that global fintech investments hit the lowest in value and volume since 2017. In 2024, private equity poured 2.55 billion in the sector from 10.5 billion in 2023. Venture capital invested 43.4 billion (49.1 billion in 2023). The total value of m&a deals went down to 49.6 billion from 60.2 billion in 2023. In 2H24 investments amounted to 43.9 billion from 51.7 billion of 1H24.
However, in 4Q24 fintech market participants invested 25.9 billion, up from 18 billion of 3Q24 while M&A deals amounted to 14.2 billion (7.4 billion in 3Q24). Venture capital investments rose to 11.2 billion from 9.7 billion.
In 2024, the pre-money median targets’ enterprise value of venture growth deals amounted to 480 million (110 million in 2023 and 463 million in 2021). The median value of M&A and venture capitals’s targets for pre-seed, seed, early stage, and later stage hit 39.7 million (30 million in 2023 and 35 million in 2021).
America’s region attracted the majority of 2023 fintech investments: 63.8 billion for 2.267 transactions, 50.7 billion of these for 1836 US deals. EMEA market participants invested 20.3 billion for 1465 operations, while ASPAC 896 investments were worth 11.4 billion.
In 2024, investors poured 31 billion in the subsector of e-payments (17.2 billion in 2023), 9.1 billion in digital assets and currencies (8.7 billion), 7.4 billion in regtech (4.4 billion), 3 billion in proptech (1.9 bilion), and 400 million in wealthtech (190 million).
US corporate venture capital’s investments amounted to 19.6 billion (26.9 billion in 2023). However, the investments of EMEA players rose to 5.8 billion (5.1 billion).
Karim Haji, KPMG International Global Head of Financial Services, commented: “In 2024, companies, venture capital firms and private equity had tough times due the magnitude of the challenges and uncertainties in the global market. With few exceptions, no one wanted to pull the trigger on the larger deals that have long been a mainstay of fintech investment. But there is much to be positive about in the run-up to 2025. Many critical elections are now behind us and investment and transaction activity is starting to grow. We are starting to see more transactions thanks to interest rate cuts in several jurisdictions and lower funding costs. However, we will have to wait and see if changing global trading conditions will have an impact on inflation, interest rates and consequently these positive signs of market change”.
KPMG analysts also point out that the e-payments subsector could remain the main global investment target. However, digital assets and currencies may grow further as market infrastructures, digital tokenisation tools and stable currencies could attract capitals. In 1H25, the AI sector may still be a priority for investors that could have interest in regtech and cybersecurity solutions.
