The first six months of 2024 were challenging for the global fintech market, characterised by geopolitical uncertainties and high interest rates. Total global investment fell from USD 62.3 billion in H2/23 to USD 51.9 billion - the lowest figure since H1/20. The EMEA region was particularly affected, where investment fell from USD 19.4 billion to USD 11.4 billion.
Stabilisation at a low level
Despite the global decline, the German fintech market showed the first signs of stabilising at a low level. Particularly noteworthy is the increase in venture capital investments of more than 20 per cent compared to H2/23. In Germany, investments increasingly focused on fintechs related to artificial intelligence (AI) and embedded finance solutions.
Key findings:
- Positive developments: Despite the global challenges, the German fintech market recorded a positive trend in H1/24 with 51 deals and an investment volume of USD 482.06 million.
- Strong focus area: AI-related fintechs dominated the market and attracted a significant share of the investment volume.
- Corporate venture capital (CVC): CVC investments have established themselves as a central player - the investment volume increased by 81 per cent compared to H1/23.
Bernd Oppold
Partner, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
Regulatory frameworks create a platform for fintechs to develop new operating and business models. The recently adopted EU AI Act is a good example of this. The new directive provides more clarity and transparency in the use of AI systems.
Successful niche strategies and CVC investments
While large fintech companies continue to face economic pressure, specialised fintechs showed promising paths. The 81 per cent increase in corporate venture capital investments compared to H1/23 is particularly noteworthy, highlighting the interest of established companies in cooperating with innovative fintechs.
The study shows that two of the top deals in H1/24 focused on lending platforms and customised banking services. This indicates that investors attach less risk to these business models and recognise their potential.
Conclusion and outlook
The German fintech market is developing positively despite global challenges. With a clear focus on fintechs related to AI and embedded finance solutions, Germany remains an attractive location for fintech investments.
