Pulse of Fintech H2 2022

2022 was a challenging year for fintech investment globally — with the Americas seeing a US$40 billion drop in investment compared to 2021’s high. The decline in deal value doesn’t tell the full story, however.

Deal volume was incredibly robust this year: the second highest total next to 2021. Seed deals saw record investment, which bodes well for the long-term fintech pipeline. At a sector level, regtech investment soared to a new high, while, geographically, the Asia-Pacific region also hit a new peak — if by a much narrower margin.

The diversity of jurisdictions attracting significant fintech deals was also very strong. In H2’22 alone, 24 different countries attracted over US$100 million fintech deals (venture capital, private equity, mergers and acquisitions) — ranging from traditional hubs like the US, UK, Singapore and Hong Kong (SAR) to less mature fintech hubs like South Korea, Luxemburg, Italy, Malaysia and the UAE. This diversity reflects the myriad value propositions offered by fintech, from enabling innovation at financial institutions to supporting small business growth and improving financial inclusion and access to financial products.

Looking across 2022, there’s no doubt that the fintech market globally saw both highs and lows.

Some key trends we’ve seen include:

• surging investment in regtech as companies look to technology to help them manage increasingly complex regulatory compliance obligations; 

• rapidly cooling investment in cryptocurrencies and crypto exchanges between H1’22 and H2’22, with more challenges expected on the horizon;

• strengthening partnerships between fintechs and incumbent financial institutions, including banks, insurance companies and wealth management firms; and

• decreasing number of large deals in H2’22 compared to 2021 and H1’22 as investors waited for valuations to stabilise.