H1 2024 - Pulse of Fintech latest edition
2024 got off to a challenging start for the fintech market globally, driven by ongoing concerns related to geopolitical uncertainty and high interest rates. Total global investment declined from $62.3 billion to $51.9 billion between H2’23 and H1’24 — the lowest six months of fintech investment since H1’20. All regions experienced a noticeable drop in fintech investment, with the EMEA region experiencing the sharpest drop.
The EMEA region saw total fintech investment drop considerably in the first half of 2024, falling from $19.1 billion in H2’23 to just $11.4 billion in H1’24 amid continued geopolitical uncertainty and a high-interest-rate environment that kept interest in large deals quite muted. The UK saw the largest share of fintech funding in the region during H1’24, attracting $7.3 billion in investment, including the $4 billion buyout of financial software company IRIS Software Group by Leonard Green, a $999 million VC round by small-business-focused marketplace platform Abound, and a $621 million raise by neobank Monzo. The largest deals outside of the UK included the buyout of payments firm Banco BPM Gruppo for $652 million and the acquisition of Switzerland based e-invoicing company Pagero by Thomson Reuters.
Key H1’24 highlights from the EMEA region include:
VC funding shows some resilience
Compared to other regions, fintech-focused VC investment in the EMEA region showed resilience in H1’24, with $5.4 billion in investment. This resilience was likely helped by small increases in VC investment in the UK, Germany, Nordics region, and Ireland. The region saw increasing interest in early-stage deals as investors showed more optimism than they have in recent months. This optimism extended to the possibility of the IPO market reopening in H2’24, although any sustained opening would likely occur after the US presidential election.
Regulations remain key focus in EMEA, particularly in the EU
The EMEA region continued to see the regulatory environment evolve in H1’24, particularly in the EU. The EU Parliament approved landmark legislation with the AI Act in March 2024; the new regulation will apply later in 2026, with some exceptions for specific provisions.22 Crypto was a particular focus, given the EU’s Markets in Crypto Assets (MiCA) regulation is set to come into effect in June 2024.23 MiCA will require that crypto companies — such as exchanges, wallet providers, and coin issuers — obtain a license to operate in order to conduct operations in the EU. The regulatory environment could drive renewed interest into the blockchain and crypto space as a result of growing regulatory confidence.
B2B-focused fintechs attracting attention in EMEA
During H1’24, B2B-focused fintech companies were of particular interest to fintech investors across EMEA, likely in part driven by their ability to produce recurring revenues. Deals in the space ranged quite broadly, with a number attracting international investors. During H1’24, for example, France-based accounting software firm Pennylane raised $43 million in VC funding from investors, including Sequoia Capital and DST Global;24 the raise earned the company unicorn status.
UK-based fintechs taking different approaches to international growth
A number of mature fintechs in the UK have targeted international expansion as a means to drive growth; however, these activities have been relatively hit or miss given the unique differences in banking practices in various target countries. This has led some mature fintechs, including Starling Bank and Oak North, to pursue other avenues for international expansion, including selling their technology internationally as banking SaaS platform plays.
Trends to watch for in H2’24
- Larger focus on Central Bank Digital Currencies (CBDC) and regulated stablecoins.
- Increasing interest in middle and front office solutions related to investment management.
- Growing investor focus on AI-powered fintech offerings, including in emerging areas like behavioural intelligence.
- Increasing investor attention on less traditional fintech markets, including Africa and parts of Southeast Asia — such as Indonesia and the Philippines.
- ESG fintech continuing to gain attention, particularly in areas like carbon measurement and tracking.
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Jussi Paski
Head of Startup & Venture Services
KPMG in Finland
Juha-Pekka Mylén
Head of Financial Services
KPMG Suomi
