Global fintech investment in 2019 fell just shy of 2018’s record with $135.7 billion invested across 2,693 deals, according to the Pulse of Fintech H2’2019, a bi-annual report on global and regional fintech investment trends published by KPMG.
The main theme for 2019’s global fintech market was diversity – with fintechs and fintech investment expanding across product, sector and geographic borders. The expanding definition of fintech and its increasing reach and interconnectivity helped keep fintech investment robust despite the global economic and trade challenges that hindered growth in 2019, including concerns related to Brexit and ongoing trade tensions between China and the US.
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In fact, despite these concerns, cross-border transactions remained high with $54.2 billion in cross-border M&A deal value across 138 deals. This focus on cross-border transactions will likely continue as maturing fintechs look to grow and achieve scale and the big tech giants look to extend their reach and gain market share in less developed markets.
Many niche areas of fintech continued to grow and evolve throughout 2019; in particular, proptech investment grew from $1.9 billion in 2018 to a record $2.6 billion in 2019, while fintech-focused cybersecurity investment more than doubled from $316.9 million to $646.2 million. Blockchain and cryptocurrency investment continued to fluctuate, falling from $6.3 billion to $4.7 billion year-over-year, although Facebook’s announcement of Libra and the People’s Bank of China’s announcement of accelerated research and experimentation on digital currency and electronic payments have helped breathe new life into the space.
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“Over the past year, the lines have really started to blur between financial services and non-financial services – with fintech companies helping to bridge the gap,” said Anton Ruddenklau, Global Co-leader of Fintech, KPMG International. “It’s a trend that will only continue into 2020. Just look at how the big tech giants are working with both traditional financial institutions and fintechs in order to seamlessly integrate financial services within their ecosystems, and at how the larger fintechs and financial institutions are looking at ways to broaden their offerings into adjacent areas.”
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