While overall global fintech funding fell during the first half of 2020, with US$25.6 billion of investment globally across 1,221 deals, corporate deals are driving continued strength in VC activity, according to the Pulse of Fintech H1’20, a bi-annual report on global fintech investment trends from KPMG International.

Despite global uncertainty, VC investment was strong in all regions of the world – and is on track to surpass previous annual record highs should the trend continue. In H1’20, VC investment in fintech accounted for $20 billion, including $9.3 billion in the Americas, $6.7 billion in Asia, and $4 billion in EMEA. Given the long lead times for deal-making, many H1’20 deals were initiated in late 2019. COVID-19 saw new deal activity slow dramatically, except in high-priority sectors like payments. Despite the pandemic, investor interest in platform businesses remained incredibly strong in H1’20, particularly in less mature fintech markets. Platform business continued to see significant investment from investors and large techs.


2020 Key Highlights

  • Global fintech investment is well behind 2019’s total investment of $150.4 billion. At mid-year, total fintech investment globally is $25.6 billion.
  •  The Americas accounted for the largest share of total fintech investment at mid-year, with $12.9 billion investment. ASPAC saw $8.1 billion in total fintech investment during H1’20, while EMEA saw $4.6 billion in fintech investment.
  • The Americas and EMEA are currently on track to see a new record annual high of VC investment in fintech. At the end of H1’20, the Americas had attracted $9.3 billion in VC investment, Asia had attracted $6.7 billion, and EMEA had attracted $4 billion.
  • Corporate VC participating investment remained very strong, accounting for $12.2 billion in fintech investment globally. The US saw a record in VC deal value with corporate participation well over $2.4 billion in Q1 2020; the following quarter nearly matched that same amount.
  •  M&A activity dropped in all regions of the world – a sharp decline due to the mega M&A activity seen during 2018 and 2019. During H1’20, global M&A deals accounted for $4 billion globally, compared to $85.7 billion in H2’19.
  • Global investment in cybersecurity flew past 2019’s record high of $592.3 million, reaching $870.8 million.


«The fintech market report for the first half of 2020 has been much looking forward to as it is interesting to see how fintech responded to coronavirus challenges. The results though have brought no big surprises. In January we projected that investments in fintech this year would amount to about USD 150 billion. The pandemic has definitely made its adjustments and overall global fintech funding fell during the first half of 2020, with US$25.6 billion of investment globally across 1,221 deals. However, the fall has been mostly caused by a shortage (or deferral?) of big M&A deals. The strategic plans of large companies accelerated more likely than not, and no negative dynamics was observed in investments in venture capital and corporate accelerations worldwide. As forecasted, the markets of South-East Asia, India and US have been particularly active.

During the quarantine period restrictions, development of the regulatory framework and state fintech acceleration programs has speeded up. This was demonstrated, in a greater extent, by the growing focus on digital platforms, neobanking, various types of contactless payments, and Wealthtech-class solutions. Europe saw a good trend in Regtech solutions market, while Southeast Asia demonstrated good dynamics in the area of cryptocurrencies and blockchain. All regions demonstrated a trend of increased attention to digital identification, ensuring security, prevention of frauds with financial transactions, and another spiral of increased attention to cloud platforms was observed.

The Central Asian market is similar in that it also demonstrates the heightened attention of the regulators and government authorities to development of fintech. This definitely contributes to the growing interest, engaging and emergence of new solutions. However, the investments are rather modest, venture capital approaches are still not numerous, and the market continues complaining about conflicts between the requirements of various legislators and regulators, which hinders development of investments. Nevertheless, new players can be expected to appear, at least in the banking market, as early as in the year to come», - comment Konstantin Aushev, director IT Advisory, KPMG in Kazakhstan and Central Asia.