Pulse of Fintech H1 2024

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—from $19.4 billion to $11.4 billion between H2’24 and H1’24.

Globally, only five $1 billion+ deals occurred in the fintech space during the first half of 2024—all buyouts. The Americas accounted for four of these deals, including Worldpay ($12.5 billion) and EngageSmart ($4 billion) in the US and Nuvei ($6.3 billion) and Plusgrade ($1 billion) in Canada. The UK accounted for the fifth deal—the $4 billion buyout of IRIS Software group. The UK also saw the largest fintech focused VC deal of H1’24—a $999 million raise by Abound.

While fintech investment remained suppressed, deal volume offered a hint of optimism for the fintech market; both the Americas—including the US—and the ASPAC region saw deal volumes increase between H2’23 and H1’24.

At a sector level, payments continued to draw the largest share of fintech funding globally, attracting $21.4 billion in H1’24. Regtech, however, was the only major fintech subsector to see investment increase in the first half of 2024—with the $5.3 billion in investment already surpassing 2023’s total. At a technology level, AI continued to be a very hot area of interest for investors, particularly in the US.

Looking back on the first half of 2024, the sentiment of fintech investors can be characterised as restrained. Consider some of the key trends we’ve seen across the fintech sector over the past six months:

• ­   Mature, stable markets attracting the largest fintech deals.
• ­   Investors continuing to shy away from the largest deals, with very few exceptions.
• ­   AI drawing significant interest, both as a means to improve operating efficiencies and as a means to reduce costs.
• ­   Regtech interest continuing to increase, particularly in the EMEA region.

With interest rate cuts taking longer to materialise than initially expected, the pick-up in investment activity predicted in H2’23 is taking longer than originally thought to come to fruition. Heading  into H2’24, fintech investment is expected to remain subdued—except, perhaps, when it comes to AI and generative AI—given the continued high cost of capital and geopolitical uncertainty.