Global Fintech Funding Declines to $52.4B, with Some Positive Ecosystem Developments, Report Reveals

The first six months of 2023 were difficult for the fintech market globally, “with both total funding and the number of deals dropping, from US$63.2 billion across 2,885 deals in H2’22 to US$52.4 billion in across 2,153 deals in H1’23.”

The cloud of uncertainty permeating the market “continued to wear on investors, driven by factors including global macroeconomic concerns (high inflation and rising interest rates), geopolitical tensions (the ongoing conflict between Russia and the Ukraine), and tech sector challenges (depressed valuations and a continued lack of exits).”

The collapse of several US banks early in 2023 likely also “kept many investors in wait and see mode during H1’23.”

But not all the news was negative in H1’23. According to the H1’23 edition of KPMG’s Pulse of Fintech, “a number of sectors attracted robust funding during the first half of 2023.”

Supply chain and logistics-focused fintechs “attracted US$8.2 billion in funding in H1’23—well above the space’s 2019 annual record of US$5.5 billion.” Green fintech also “had robust interest, with US$1.7 billion of funding during H1’23— already slightly ahead of its 2022 results (US$1.5 billion).”

At a regional level, the Americas “saw fintech funding grow—from US$28.9 billion to US$36.1 billion between H2’22 and H1’23—despite a decline in deals volume—from 1,323 to 1,011 deals—over the same timeframe.”

In the EMEA region, fintech funding “dropped by more than 50%, falling from US$27.3 billion across 963 deals in H2’22 to US$11.2 billion across 702 deals in H1’23.” Fintech funding also dropped in the ASPAC region—”from US$6.8 billion across 583 deals in H2’22 to US$5.1 billion across 432 deals in H1’23.”

Judd Caplain, Global Head of Financial Services at KPMG International, said:

“It wasn’t a surprise to see fintech funding decline in the first six months of 2023, given the enormous headwinds pressuring the market at the moment. But the long-term business case for many subsectors within fintech remains very strong—particularly for sectors like payments, insurtech, and wealthtech. Once market conditions begin to even out, funding will likely rebound–if not to the record level experienced in 2021.”

H1’23—Key Highlights:

  • Global funding in fintech dropped from US$63.2 billion across 2,885 deals in H2’22 to US$52.4 billion across 2,153 deals in H1’23.
  • The Americas attracted US$36.1 billion in fintech funding across 1,011 deals in H1’23—of which the US accounted for US$34.9 billion across 809 deals. The EMEA region attracted US$11.1 billion across 702 deals, while the ASPAC region attracted US$5.1 billion across 432 deals.
  • Global VC funding declined from US$28.3 billion in H2’22 to US$27.3 billion in H1’23.
  • The Americas attracted US$16 billion in funding during H1’23—of which the US accounted for US$15.1 billion, while EMEA attracted US$6.6 billion in VC funding, and the ASPAC region saw US$4.6 billion.
  • Global M&A activity was quite soft in H1’23, with only US$24 billion in deal value, including US$19.3 billion in the Americas (US$19.2 billion in the US), US$4.3 billion in the EMEA region, and US$460 million in the ASPAC region.
  • Global PE funding was also very soft with US$1.1 billion in funding in H1’23, including US$768 million in the Americas (US$627 million in the US), US$279.5 million in the EMEA region, and US$60.5 million in the ASPAC region.
  • Corporate-participating funding accounted for US$16.7 billion in funding during H1’23, including US$10.8 billion in the Americas (US$10.4 billion in the US), US$3.1 billion in the ASPAC region, and US$2.7 billion in the EMEA region.
  • Payments accounted for US$16.2 billion of funding in H1’23, while artificial intelligence and machine learning focused fintech attracted US$8.8 billion, supply chain and logistics focused fintech attracted US$8.2 billion, and insurtech attracted US$4.7 billion.
  • The US accounts for more than two-thirds of H1’23 fintech funding

The US took “the lion’s share of fintech funding in H1’23, its US$34.9 billion in funding accounting for more than two-thirds of the US$52.4 seen globally.”

The US also “attracted five of the seven US$1 billion+ fintech deals of H1’23, including the US$8 billion buyout of Coupa by Thomas Bravo, the US$6.9 billion VC raise by Stripe, the US$4 billion acquisition of EVO payments by Global Payments, the US$2.6 billion buyout of Duck Creek Technologies by Vista Equity Partners, and the US$1.8 billion buyout of Moneygram by Madison Dearborn Partners LLC.”

The EMEA region and ASPAC regions each “attracted a single US$1 billion+ deal during H1’23; in EMEA, UK-based Wood Mackenzie was acquired by Veritas Capital for US$3.1 billion, while in ASPAC, China-based Chongqing Ant Consumer Finance held a US$1.5 billion VC funding round.”

EMEA region sees falls “more than 50 percent in funding between H2’22 and H1’23
Total fintech funding in the EMEA region was just US$11 billion in H1’23—less than half the US$27 billion seen in H2’22.”

The UK attracted “over half of this amount (US$6 billion), including the US$3.1 billion buyout of Wood Mackenzie by Veritas, a US$602 million raise by AI-powered lending company Abound, and a US$250 million raise by e-trading platform eToro.”

While other countries in the region lagged far behind the UK’s results, several countries attracted deals over US$250 million, “including France (Ledger—US$493 million), Switzerland (Teylor—US$299 million; Metaco—US$250 million), and Mauritius (Bold Prime—US$250 million).”

Sponsored Links by DQ Promote



Send this to a friend