Americas

In H1 2023, fintech funding in the Americas reached $36.1B with 1,011 deals.

08 August 2023

Fintech funding in the Americas strengthens in H1’23

Total fintech funding in the Americas rose from $28.9 billion in H2’22 to $36 billion in H1’23, although it remained relatively weak compared to the level of funding seen between H2’20 and H1’22. While the region attracted a number of sizeable transactions — all in the US — total deal volume dropped significantly; deal volume in Q2’23 was particularly weak, falling to a twelve-quarter low. Given the amount of funding still available in the market, the decline in deals volume likely reflects a number of factors, including investors being much more selective about the deals they go after and valuation differences between what sellers want and what buyers are willing to pay. Key H1’23 highlights from the Americas include:

Dave Remue

Director, Head of Fintech, KPMG Advisory

KPMG in Belgium

Profile | | Phone

US attracts majority of fintech funding in Americas

The US accounted for the vast bulk of fintech funding in the region, including six deals over $1 billion: Coupa ($8 billion), Stripe ($6.8 billion), EVO Payments ($4 billion), Duck Creek Technologies ($2.6 billion), Moneygram ($1.8 billion), and Paya ($1.3 billion). Outside of the US, only two countries attracted $100 million+ funding rounds: Mexico, which saw a $175 million raise by SMB-focused fintech Kapital, and Canada, which saw a $125 million raise by bitcoin infrastructure company Blockstream.

Crypto funding in the US on pause; blockchain interest persists

Following on the collapse of a number of crypto companies in 2022 and the increasing focus of the SEC on crypto companies, many traditional investors in the US pulled back from the space during H1’23. While there were a handful of larger crypto deals in H1’23, including the $155 million acquisition of Apex Crypto in the US and the $125 million raise by Canada-based Blockstream, funding was incredibly low relative to the last few years. Non-crypto focused blockchain-based technologies continued to attract interest, as evidenced by the $320 million acquisition of remittance-focused technology company GammaRey by fintech data analytics company GoLogiq.

We’re seeing investors, whether corporates or VC or PE firms, being much more selective around the businesses in which they invest. If they’re going to pay a high multiple, then the business has to be performing really, really well — not only from a growth perspective, but also from an operating perspective. While investors used to pour money into companies because of their growth story, now investors want to see a positive cash flow, if not a profitable company, in addition to high growth.

Robert Ruark
Principal, Financial Services, Strategy and Fintech Leader
KPMG in the US

Payments sector remains resilient

Compared to other sectors, the payments space showed strong resilience in the first half of 2023, with most of the largest transactions in the Americas occurring in the space. This resilience likely reflects the robustness of payments business models, which work both in good economic times and in bad ones.

B2B payments were particularly high on the radar of investors during H1’23, evidenced by the $8 billion buyout of spend management platform Coupa by Thomas Bravo, and the $4 billion acquisition of payments services provider EVO Payments by Global Payments. The size of these deals highlights the importance of scale in order for payments companies to be able to compete effectively in an increasingly mature sector.

Insurtech continues to attract interest

Interest and funding in insurtech remained relatively robust in the Americas, led by the $2.6 billion buyout of Duck Creek Technologies by Vista Equity Partners. The technologies being used by many legacy insurance players in the Americas, particularly in the US, is quite antiquated; investors recognize that there is a real opportunity to upgrade these technologies and the modularity of these technologies. As such, funding in the space will likely remain strong over the long term, even if deal speed slows further.

Trends to watch for in H2’23

Growing focus on AI and generative AI use cases in the areas of financial planning and wealth management.
Increase funding as the financial markets normalize and there is more certainty that inflation is going down and that interest rates are stabilizing.
Growing diversity of geographic locations within the Americas — and domestically within the US — attracting fintech funding.
Continued focus on B2B fintech solutions, particularly those focused on helping financial services companies improve efficiencies.
Accelerating payments deal volumes across the Americas as the market turns more positive, with increasing interest from PE firms.