Americas

Fintech investment in the Americas weakens slightly despite increase in deal volume

Total fintech investment in the Americas fell slightly—from $38.5 billion in H2’23 to $36.7 in H1’24—although the number of fintech deals rose from 1,066 to 1,123 over the same period. Given the high interest rate environment, geopolitical uncertainty, and lingering valuations challenges, fintech investors showed a subdued appetite for making the largest deals. Growth stage VC investment was particularly weak in H1’24, with just $1.6 billion, compared to over $10.5 billion during all of 2023.

Key H1’24 highlights from the Americas include: 

US attracts majority of fintech investment in Americas: The US accounted for $27.4 billion of the $36.7 billion in fintech investment seen in the Americas during H1’24, including the $12.5 billion acquisition of Worldpay by GTCR, the $4 billion buyout of B2B customer engagement platform EngageSmart by Vista Equity Partners,1 the $930 million acquisition of financial research firm Tegas by AlphaSense,2 and the $685 million VC raise by capital markets platform company Clear Street.

Canada sets new record for fintech investment in H1’24 as investment: Outside of the US, fintech investment in Canada was particularly notable in H1’24, reaching a record high of $7.8 billion for a six-month period. Two deals accounted for the bulk of this funding—the $6.3 billion acquisition of payments firm Nuvei by Advent International and the $1 billion buyout of revenue solutions firm Plusgrade by General Atlantic.3 While fintech remains a big ticket for investors in Brazil, investment in H1’24 was quite weak, with just $616 billion in investment compared to $1.8 billion in H2’23.

Valuations gap persists in VC and PE space: Within the Americas, the high interest rate environment combined with a continued gap in valuations and the search for quality assets kept VC and PE investment in fintech somewhat soft during H1’24. On the M&A front, the focus of deals has shifted somewhat in H1’24; whereas in 2023 a number of larger organizations looked to divest underperforming parts of their business in order to concentrate on their core, the first half of 2024 saw companies looking at opportunities to make smaller acquisitions aimed at enhancing their capabilities in specific areas.

Growing interest in taking fintechs private: During 2021 and 2022, there was a significant amount of IPO activity in the fintech space, including a number of fintechs going public via SPAC mergers. Since that time, a number of these companies have struggled given the challenging market environment. This has led to growing interest in taking companies that went public early private again. During H1’24, the largest of these take private deals was Nuvei – which was taken private by Advent International for $6.3 billion.