The Pulse of Fintech The Pulse of Fintech

Global fintech investment roared ahead at a record pace in the first half of 2018, with US$57.9B invested across 875 deals, a significant increase from the US$38.1B invested in all of 2017, according to the KPMG Pulse of Fintech report. 

Highlights of the first half included the successful closing of two massive deals: the record-setting US$14B raise by Ant Financial in Q2’18 and Vantiv’s acquisition of WorldPay for US$12.9B in Q1’18.

H1’18 key highlights

• Global fintech investment (PE, VC and M&A) more than doubled – from US$22B in the second half of 2017 to a new high of US$57.9B in H1’18, buoyed by nine US$1B+ megadeals. 
• Europe’s top four fintech deals accounted for US$22.4B in investment, including the US$12.9B acquisition of WorldPay by UK-based Vantiv.
• In H1’18, investment in fintech companies in Asia hit US$16.8B across 162 deals, an increase from 119 deals in H2’17.
  
  Fintech VC volume has remained relatively steady since the start of 2015 – rising slightly to 653 deals in H1’18.
  
• Median late stage VC deal size within the fintech sector rose dramatically - from US$14M in 2017 to US$25M in H1’18.

 

Asian fintech reaches US$16.8B – on strength of Ant Financial deal

After a solid US$2B in H2’17, total fintech funding in Asia surged to US$16.8B across 162 deals in H1’18 powered by a massive US$14B Series C VC funding round by Ant Financial. Excluding this mega-deal, Asia still saw strong fintech investment, including quarter-over-quarter increases in overall fintech investment in India, Australia, and Singapore.  

Following a global trend, median fintech VC late stage deal size in Asia increased significantly during the first half of the year – rising from US$25M to US$37.7M – the highest of any region. Blockchain and AI continued to be key priority areas for fintech investors in Asia, in addition to insurtech and regtech. 

Blockchain moving beyond experimentation

Blockchain continued to draw a significant amount of attention from investors in H1’18, with investment typically focused on more experienced companies and consortia looking to obtain additional rounds rather
than on new market entrants. Large rounds in blockchain companies were seen during the first half of 2018, including US$100M+ rounds to R3 and Circle Internet Finance in the US, and US$77M to Ledger in France.

Strong outlook expected for fintech investment

With a significant amount of capital waiting to be deployed, a growing diversity of fintechs hubs across the globe, and more and more corporates looking to leverage fintech in order to drive innovation, investment in finech is expected to remain strong heading into the second half of 2018.

The Financial Services industry is transforming with the emergence of innovative new products, channels and business models. This wave of change is driven by evolving customer expectations, digitalization, as well as continued regulatory and cost pressures. We are passionate about supporting clients to successfully navigate this transformation, mitigating the threats and capitalizing on the opportunities.

KPMG Global Fintech comprises professionals in over 45 fintech hubs around the world, working closely with financial institutions and fintech companies, to help them understand the signals of change, identify the growth opportunities and to develop and execute on their strategic plans.