The first six months of 2023 were particularly challenging for the fintech market in Ireland as well as globally, according to KPMG’s Pulse of Fintech H1 2023 report. However, the market is expected to rebound when market conditions even out, says Ian Nelson, Head of Financial Services.
Both funding and the total number of deals dropped sharply in Ireland from $742 million across 9 deals in H2’22 to 9 deals worth $59.22 million. It is worth nothing however that activity in H2’22 was skewed significantly by one large transaction – the purchase of Cork-based Global Shares by J.P Morgan for $676 million, by far the largest deal in the last twelve months.
The trend in Ireland in H1’23 reflected the global trend with deals dropping from US$63.2 billion across 2,885 deals in H2’22 to US$52.4 billion in across 2,153 deals in H1’23. In the EMEA region, fintech funding dropped by more than 50%, falling from US$27.3 billion across 963 deals in H2’22 to US$11.2 billion across 702 deals in H1’23.
The largest fintech deal seen in Ireland during H1’23 was $53 million raised by unified payments company NomuPay. The only other deals over $1m for the period were ones by Outmin, an automated accounting and bookkeeping platform and Dimply, which is developing a customer interface for financial services providers, both raising just over $2 million each.
Ian Nelson, Head of Financial Services
Fintech likely to rebound as market conditions normalise
Ian Nelson, Head of Financial Services at KPMG Ireland noted: “It’s not a surprise that fintech funding has declined in the first six months of 2023, given the enormous headwinds pressuring the market at the moment. However, our long-term view is that there are strong business cases for many subsectors within fintech to remain robust, notably within regtech, payments, insurtech and wealthtech. We expect that funding will rebound when market conditions begin to even out, if not necessarily to the record level experienced in 2021.”
Fintech H1’23—Key global highlights – H1’23
- Global funding in fintech dropped from US$63.2 billion across 2,885 deals in H2’22 to US$52.4 billion across 2,153 deals in H1’23.
- The Americas attracted US$36.1 billion in fintech funding across 1,011 deals in H1’23—of which the US accounted for US$34.9 billion across 809 deals. The EMEA region attracted US$11.1 billion across 702 deals, while the ASPAC region attracted US$5.1 billion across 432 deals.
- Global VC funding declined from US$28.3 billion in H2’22 to US$27.3 billion in H1’23. The Americas attracted US$16 billion in funding during H1’23—of which the US accounted for US$15.1 billion, while EMEA attracted US$6.6 billion in VC funding, and the ASPAC region saw US$4.6 billion.
- Global M&A activity was quite soft in H1’23, with only US$24 billion in deal value, including US$19.3 billion in the Americas (US$19.2 billion in the US), US$4.3 billion in the EMEA region, and US$460 million in the ASPAC region.
- Global PE funding was also very soft with US$1.1 billion in funding in H1’23, including US$768 million in the Americas (US$627 million in the US), US$279.5 million in the EMEA region, and US$60.5 million in the ASPAC region.
- Corporate-participating funding accounted for US$16.7 billion in funding during H1’23, including US$10.8 billion in the Americas (US$10.4 billion in the US), US$3.1 billion in the ASPAC region, and US$2.7 billion in the EMEA region.
- Payments accounted for US$16.2 billion of funding in H1’23, while artificial intelligence and machine learning focused fintech attracted US$8.8 billion, supply chain and logistics focused fintech attracted US$8.2 billion, and insurtech attracted US$4.7 billion.
The Pulse of Fintech report produced by KPMG analyses the latest global and Irish trends in investment data and provide insights from both a global and regional perspective. All figures cited are in USD; data for the reports is provided by PitchBook.
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Partner, Head of Financial Services & Regulatory
KPMG in Ireland
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