Welcome to the 2018 end-of-year edition of KPMG’s The Pulse of Fintech — a biannual report highlighting key trends and activities within the fintech sector globally and in key markets around the world.
Fintech investment increased substantially in 2018, with total global investment dollars across M&A, PE and VC more than doubling from $50.8 billion in 2017 to $111.8 billion in 2018. Mega deals throughout the year — including Vantiv’s acquisition of Worldpay for $12.86 billion in Q1, Ant Financial’s record-shattering VC raise of $14 billion in Q2, and PE firm Blackstone’s $17 billion investment in Refinitiv in Q3 — helped to spur interest and activity in the fintech market.
The Americas, Europe and Asia all saw significant growth in fintech investment, although the total number of deals globally only increased slightly. This modest increase was driven primarily from the US and the Americas, where deal volume saw solid increases year-over-year. Both Asia and Europe saw a decline in their fintech deal volume, mirroring a trend seen across the broader investment market.
M&A and buyouts accounted for the largest fintech investments during the year in both the Americas and Europe, while VC investments reigned supreme in Asia. At a technology level, payments and lending continued to attract the most significant investment dollars globally, although insurtech and regtech were also quite high on the radar of investors.
The outlook is positive for fintech investment heading into 2019, in part due to the strong and highly diverse fintech hubs cropping up around the world, as well as growing recognition from both incumbents and scaled fintech companies that M&A is an important part of their growth strategies. There is likely to be an increase in investment focused on solutions targeted to the needs of unbanked and underbanked people in the developing world, including southeast Asia and Africa, even as more developed regions see a growth in fintechs that can reduce operating costs, improve service quality and expand customer reach.
We discuss these and a number of other trends in this edition of the Pulse of Fintech, in addition to examining other questions driving interest in the fintech market globally, including:
- Why is global growth pivotal for fintech success?
- Will regtech be the next big fintech play?
- How are corporates reshaping the fintech industry?
- How is blockchain investment evolving into a product play?
We hope you find this edition of The Pulse of Fintech insightful and informative. If you would like to discuss any of the information contained in this report in more detail, contact a KPMG advisor in your area.
All currency amounts are in US$ unless otherwise specified. Data provided by PitchBook unless otherwise specified.
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