2021 has been a remarkable year for the fintech market, with a record number of deals in every major region – including the Americas, EMEA, and the Asia-Pacific. Fintech investment was incredibly strong, with both VC and PE investment soaring to record highs. The breadth of fintech solutions attracting investment continued to expand and grow, with surging interest in cryptocurrencies and blockchain, wealthtech, and cybersecurity.
Entering 2022, the optimism for fintech investment globally is very strong, with different subsectors well-positioned to keep evolving and new ones expected to emerge and flourish.
Whether you’re the CEO of a large financial institution or the founder of an emerging fintech, the opportunities are near-boundless if you’re willing to re-imagine what’s possible and refuse to let legacy structures and thinking get in the way. As you read this edition of Pulse of Fintech, ask yourself: What do we need to do today to become a more robust organisation able to create unique value for our customers, clients, and investors?
|Investment in Australian innovation in financial services is back on the rise as the sector attracts over $1.5 billion in fintech investment.|
Australia saw a continued rebound over the course of the year, with H2’21 recording over $1.5 billion in fintech investment and total investment for the 2021 year reaching in excess of $2.5 billion, nearly equaling the pre-COVID highs seen in 2019 ($2.6 billion).
- Investment took place across a wide range of sub-sectors, with notable investment continuing in the payments space through Airwallex and Till Payments who raised a total of $300 million and AU$125 million respectively over the period.
- Neobank activity also continued on the back of the 86 400 / NAB transaction which took place in H1’21, with Judo Bank successful listing on the ASX, whilst Alex Bank finalised a AU$20 million investment on the back of securing its restricted banking license (RADI).
Whilst corporate investment was less prominent than H1’21, strategic M&A remains a priority, with Latitude acquiring digital consumer lender Symple Loans and deals announced for the acquisition of Afterpay by US-headquartered Block (formerly Square) and Society One by MoneyMe (both were announced in the period but are only expected to complete in H1’22).
The fintech sector continues to mature and rebound in Australia – investments are taking place across a range of sub-sectors and from a broad set of investor groups. We are continuing to see investment in start-up and scale-up businesses, as well as significant M&A activity for more mature players in the space. We expect this momentum to continue and predict that 2022 will be a record year for fintech investment in Australia.
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To learn more about the analysis and topics raised in this edition, or to discuss your organisation's unique fintech agenda and roadmap, please contact your local KPMG advisors or the contributors in this publication.
Top fintech trends for 2022
During 2021, interest and investment in fintech grew significantly in many regions of the world –its scope broadening well-beyond its early definition. This expanding scope, combined with the growing maturity of a number of fintech subsectors, increasing investment in less mature jurisdictions, and surging corporate interest, is expected to keep investment high as we enter 2022. Here are some of the top predictions for the fintech market globally:
- Growing number of banks will offer embedded solutions.
- There will be increasing regulatory scrutiny of embedded financial offerings.
- Fintechs will focus on branding themselves as data organisations.
- ESG-focused fintechs will have a big growth trajectory.
- There will be a stronger focus on dealmaking in underdeveloped regions.
- Unicorn status will lose some of lustre in developed markets, remain key in emerging ones.
Interviews and insights on emerging tech trends
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