Pulse of Fintech H2 2021

The global fintech market showed remarkable growth in 2021 amounting to $210 billion in investments with a record number of 5,684 deals. The investments revealed a growing interest in cryptocurrencies and blockchain, wealthtech, and cybersecurity. Investments in crypto and blockchain grew from $5.4 billion in 2020 to over $30 billion in 2021, which was largely due to the global increase in the level of recognition for the potential role of crypto and its underlying technologies in modern financial systems.

The fintech segments include Payments, Insurtech, Regtech, Cybersecurity, Wealthtech, and Blockchain/cryptocurrency. In 2021 payments was the dominating segment for fintech investments drawing record VC funding. While global VC investment in the payments sector soared to an annual record high, M&A accounted for the largest deals of the year – including the $9.2 billion acquisition of Denmark-based Nets by Nexi.

Numerous trends are working together to drive both established companies and startups to reimagine what financial services means and what it will likely look like in the post-pandemic world. There is a global optimism that fintech investments in these segments will continue to grow throughout 2022 and the fintech field will keep evolving with new subsectors emerging and evolving.

1.      Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A

2.      Nets — $9.2B, Ballerup, Denmark — Payments — M&A

3.      Adenza — $3.75B, San Francisco, US — Institutional/B2B — Buyout

4.      Robinhood — $3.4B, Menlo Park, US — Wealth/investment management — Series G

5.      Verafin — $2.75B, St. John’s, Canada — Institutional/B2B — M&A

6.      Paidy — $2.7B, Tokyo, Japan — Lending — M&A

7.      Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A

8.      SoFi — $2.4B, San Francisco, US — Lending — Reverse merger

9.      Divvy — $2.3B, Draper, US — Payments/transactions — M&A

10.   Tink — $2.2B, Stockholm, Sweden — Banking — M&A

Here are KPMG's top predictions for the fintech market globally:

1.      Growing number of banks will offer embedded solutions

2.      There will be increasing regulatory scrutiny of embedded finance offerings

3.      Fintechs will focus on branding themselves as data organizations

4.      ESG-focused fintechs will have a big growth trajectory

5.      There will be a stronger focus on dealmaking in underdeveloped regions

6.      Unicorn status will lose some of lustre in developed markets, but remain key in emerging ones

For more details, please read the full report.