Fintech investment globally reached $37.9 billion during the first half of 2019 across 962 deals, KPMG’s H1 2019 Pulse of Fintech report said.
Both the number of global fintech deals and the total global investment in fintech dropped in H1 2019, driven primarily by the lack of mega deals like 2018’s $14 billion raise by Ant Financial and the $12.9 billion acquisition of Worldpay by Vantiv.
Fintech investment in Europe reached $13.2 billion across 307 deals. Though the UK saw the highest volume of fintech deals in Europe, Germany and France saw the two biggest deals of H1 2019: the $6 billion acquisition of Concardis and the $1.3 billion acquisition of eFront. Norway also saw a big transaction in the $383 million acquisition of Oslo Børs VPS Holding by EuroNext.
Fintech investment in Asia Pacific reached $3.6 billion across 102 deals. Both VC investment and M&A activity in Asia Pacific dipped significantly during the first half of the year. A lack of megadeals in China accounted for the majority of the decline — with investors holding back given both the US-China trade tensions and the increasing regulatory focus being given to fintech and fintech companies by Beijing.
Fintech investment in Americas reached $21 billion across 545 deals. Venture capital fintech investment hit record quarter high at $4.8 billion in Q2 2019. US has dominated but Argentina and Canada pulled in three of top 10 fintech deals. Canada saw surge of $1.55 billion in fintech investments in Q2 2019.
Fintech investment in the U.S. dipped during H1 2019, reaching $18.3 billion across 470 deals. The $6.9 billion buyout of business analytics firm Dun & Bradstreet by a consortium of investors was the top fintech deal in the U.S. and globally during the first half of the year.
The top five fintech deals in the U.S. were Investment Technology Group: $1 billion; CSI Enterprises: $600 million; PIEtech: $500 million; IQMS: $425 million; and Viteos Fund Services: $330 million.
“The payments space continues to be hot, demonstrating there’s plenty of long-term growth potential in the sector, including verticals like healthcare payments,” Robert Ruark, Financial Services Strategy and Fintech leader, KPMG, said.
Fintech-focused Venture Capital (VC) investment reached a record level in the U.S. during Q2 2019, bolstered by $300 million funding rounds to Carta and Affirm.
Fintech investment in the US is poised to see record-breaking highs in the second half of the year.
Three massive M&A deals were announced in H1 2019, including Fiserv’s acquisition of First Data for $22 billion, Fidelity’s acquisition of Worldpay for $43 billion, and the merger of Global Payments with Total System Services for $21.5 billion.
The report says the payments space is expected to be a key area of focus for investors, along with B2B services. Security will also likely be a hot area, and online gaming could also see growth.