- Irish FinTechs attracted $60.83 million in investment in 2023, down a substantial 94% compared with over $1 billion in investment in 2022
- The largest FinTech deal in Ireland in 2023 was $53 million raised by unified payments company NomuPay
- Global FinTech investment drops from US$196.6 billion in 2022 to a six-year low of US$113.7 billion in 2023
2023 was a challenging year for the Irish FinTech market, with investments and transactions reaching $60.83 million across 11 deals; this was a significant decrease (94 percent) compared to last year, where investments and transactions totalled over $1 billion across 22 deals, according to the Pulse of FinTech H2'23—a bi-annual report published by KPMG highlighting global FinTech investment trends.
But Ireland was not an outlier. Global investment dropped from US$196.6 billion across 7,515 deals in 2022 to a six-year low of US$113.7 billion across 4,547 deals in 2023.
Looking at the two halves of 2023, FinTech investment in the EMEA region grew considerably in H2'23, accounting for $16.3 billion in investment compared to $8.2 billion in H1'23. But the annual total was very disappointing, and the $24.5 billion of investment accounted for the lowest level of FinTech funding in seven years. Conflicts in Ukraine and the Middle East, the high-interest rate environment, and the barren exit environment across regions saw FinTech investors holding onto their cash throughout the year.
A resilient FinTech ecosystem
Commenting on FinTech activity in Ireland during 2023, Ian Nelson, Head of Financial Services & Regulatory at KPMG in Ireland, said: "Despite a challenging year, the Irish FinTech market is resilient and innovative and is anticipated to recover once market conditions stabilise. There are still plenty of opportunities for disruptors, especially within regtech, payments, insurtech and wealthtech. Other exciting FinTech innovations on the horizon include using Web 3.0, the continued development of AI into offerings, ESG and open banking. Investors are still willing to back innovative companies with market-leading technology and market opportunity, especially in key sectors, including AI, cleantech and life sciences."
Nelson adds, "As outlined in the Ireland for Finance Action Plan 2023, FinTech and digital finance have continued to grow in importance in Ireland and are becoming a strong driver of employment growth. But finding the balance between regulating FinTechs and supporting innovation will remain tricky."
Finding the balance between regulating FinTechs and supporting innovation will remain tricky.
The Irish market in 2023
Anna Scally, Head of Technology and Media at KPMG in Ireland, said, "Given the level of uncertainty in the market in 2023, it was no surprise to see FinTech investment fall substantially from the levels seen over the last two years. While H1'24 is likely to start in a very subdued fashion, any downward movement in interest rates could spur some renewal of deals activity. The exit environment will also be critical to watch as the extended lack of exits has made investors hesitant to deploy funds. Investors remain cautious and will be looking to invest in companies that can demonstrate a clear path to sustainable revenue and profitability."
Focussing on H2’23, Ireland's FinTech sector recorded a mere $1.61 million in M&A, venture capital and private equity transactions across two deals. This reflects a significant drop from the $742 million for the same period last year when H2'22 was admittedly skewed significantly by one significant transaction – the purchase of Cork-based Global Shares by J.P Morgan for $676 million. Q4’23 marked a unique and salutary milestone, recording no FinTech transactions – the first time since Q4’12.
The largest FinTech deal in Ireland in 2023 was $53 million raised by the Irish registered unified payments company NomuPay. The other deals over $2m in 2023 were those by Trustap, which provides an end-to-end digital transaction platform; Outmin, an automated accounting and bookkeeping platform; and Dimply, which helps financial services companies drive customer engagement.
Investors remain cautious and will be looking to invest in companies that can demonstrate a clear path to sustainable revenue and profitability.
Trends to watch in H1'24
Global key highlights – 2023
- Global FinTech investment was US$113.7 billion across 4,547 deals in 2023 – down from US$$196.6 billion across 7,515 deals in 2022.
- The Americas attracted US$78.3 billion across 2,136 deals in 2023—of which the US accounted for US$73.5 billion across 1,734 deals—while the EMEA region attracted US$24.5 billion across 1,514 deals, and the ASPAC region attracted US$10.8 billion across 882 deals.
- Global M&A deal value dropped from US$98.2 billion in 2022 to US$56.4 billion in 2023; global VC investment declined from US$88.8 billion to US$46.3 billion year-over-year. PE growth investment showed the most resilience, up from US$9.6 billion in 2022 to US$11 billion in 2023.
- Payments remained the strongest area of FinTech investment globally in 2023, with US$20.7 billion in investment compared to US$58 billion in 2022; 2023 investment in other notable sectors included proptech (US$13.4 billion), insurtech ($8.1 billion), crypto and blockchain (US$7.5 billion), regtech (US$2.6 billion), ESG FinTech (US$2.3 billion), and cybersecurity (US$1.3 billion).
- Corporate-participating VC investment globally fell from US$45.9 billion in 2022 to US$25.2 billion in 2023.
Get in touch
The pace of change is challenging leaders like never before. To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with Anna Scally or Ian Nelson of our Fintech team.
We’d be delighted to hear from you.
Ian Nelson
Partner, Head of Financial Services & Regulatory
KPMG in Ireland
Anna Scally
Partner, International Tax & TMT Sector lead for KPMG in EMA
KPMG in Ireland
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Sandra Farrell
Associate Director of Communications
KPMG in Ireland