Global Insights

Americas attracts largest share of fintech investment and deals volume despite significant drop

Global investment in fintech sank to a five-year low of $113.7 billion across 4,547 deals in 2023 as investors pulled back from making large deals amidst concerns about stubbornly high interest rates, conflicts in Ukraine and the Middle East, falling fintech valuations, and the parched exit environment. The Americas attracted the largest share of investment during the year, accounting for $78.3 billion in fintech funding across 2,136 deals — of which the US took $73.5 billion across 1,734 deals — compared to $24.5 billion across 1,514 deals in the EMEA region and $10.8 billion across 882 deals in the ASPAC region.

H2’23 sees small uptick in global fintech investment, driven by 6 $1 billion+ deals

Fintech investment globally grew slightly between the first and second half of the year, rising from $55.5 billion in H1’23 to $58.2 billion in H2’23. Six $1 billion+ deals helped propel H2’23 results, including the $11.7 billion acquisition of US-based Black Knight by Intercontinental Exchange, the $10.5 billion acquisition of US-based Adenza by Nasdaq, a $6.9 billion PE raise by UK-based Finastra, the $1.2 billion buyout of US-based Avantax by Cetera, the $1 billion VC raise by California-based Generate and the $1 billion acquisition of Brazil-based Pismo by Visa.

Global fintech-focused VC investment falls off a cliff in 2023

Global VC investment in fintech dropped dramatically, both year-over year — from $88.8 billion in 2022 to $46.3 billion in 2023 — and between H1’23 ($27.5 billion) and H2’23 ($18.8 billion). While VC investment declined across all deal stages, investment in later stage deals fell off a cliff —dropping from $37.4 billion in 2022 to $14.1 billion in 2023. While the economics of VC dealmaking changed dramatically over the course of the year, VC investors globally continued to show interest in a number of areas, most notably AI-focused fintech solutions.

• Growing optimism across the fintech sector as interest rates start to stabilize and valuations normalize.
• Strengthening interest in M&A opportunities, with investors increasingly looking at distressed assets.
• The payments sector remaining the hottest ticket in fintech, with increasing consolidation as companies look to scale and grow locally, regionally, and globally.
• AI continuing to be a major focus of companies across the fintech sector.
• The UAE continuing to evolve into a regional fintech hub, attracting additional attention from global investors and larger deal sizes.
• Continued focus on the development of partnerships and alliances able to help companies extend their reach and value.