The fintech market remains under pressure, according to a report from KPMG which noted that in 2024, global fintech investments “fell to USD 95.6 billion – a level last seen in 2017.”
As noted in the research report from KPMG, geopolitical conflicts and an uncertain market situation “characterized by numerous elections in various countries had a particularly inhibiting effect on the willingness to invest.”
Although global fintech investments fell overall “from USD 51.7 billion in the first half of 2024 to USD 43.9 billion in the second half of 2024, there are signs of a slight recovery for 2025: venture capital investments rose from USD 18.0 billion in the third quarter of 2024 to USD 25.9 billion in the fourth quarter of 2024.”
This is shown in the latest edition of KPMG’s “Pulse of Fintech”, for which data from Pitchbook was analyzed.
After a very volatile year in 2024, calm and stability “are gradually returning to the markets. Falling interest rates are also helping to make venture capitalists more willing to invest again.”
This gives hope for a “positive development in the fintech sector.”
In a regional comparison, investments in fintechs decreased in most markets:
In the Americas, they fell to a six-year low “of USD 63.8 billion in 2024, while the EMEA region also performed worse than in the previous year at USD 20.3 billion, with the second half of the year being particularly weak at just USD 7.3 billion.”
In the Asia-Pacific region (ASPAC), investments even “fell to a ten-year low of USD 11.4 billion, with China and India in particular recording declines, while Australia and Japan remained stable.”
Canada was the only bright spot in 2024, “with investments climbing to a record high of USD 9.4 billion.”
The weak economic situation in Germany is also “reflected in fintech investments in 2024: with only USD 815 million, Germany made a significant contribution to the overall weak result in the EMEA region.”
By comparison, the United Kingdom has reportedly “recorded USD 9.9 billion.”
In addition to the stronger financing infrastructure, the reasons for the considerable difference “between the UK and Germany can also be found in a more business-friendly regulatory environment characterized by tax incentives and support programs.”
Despite the decline, there are also reasons for “cautious optimism in Germany in 2025: new regulations such as the law on e-billing or the requirements for real-time transfers will come into force in 2025, which could give the German fintech market a boost.”
In particular, the market in Germany offers “growth potential for fintechs from the payments sector, for example in cashless payments in real time and improving the digital infrastructure.”
A global comparison of sectors shows “an ambivalent picture: While investments in startups from the payments sector almost doubled to USD 31 billion in 2024 compared to the previous year (USD 17.2 billion), capital investments in fintechs from the insurance sector (insurtechs) fell to just under USD 3.1 billion in 2024.”
This is mainly due to the “lack of large transactions (2023: USD 8.1 billion).”
Fintechs with wealth technology solutions (wealthtech), on the other hand, showed the “most positive development: Global investment in this sector doubled from a more than ten-year low of 190 million dollars in 2023 to 400 million dollars in 2024.”