Fintech Corps Hold Firm Despite Investment Depreciation
A recent report published by KPMG has revealed that despite the large-scale economic downturns, the Fintech Industry has held its own so far this year. Global investments in the sector have seen a minor decrease of 3 percent from approx. 111 Billion USD to roughly 108 Billion USD. These figures are neither a cause for concern nor a reason for celebration. However, the stability of the Fintech Industry is established further.
On a similar note, there was a slight depreciation in the total number of concluded deals in the industry. In the previous Financial Year, approximately 3400 deals were closed in this sector. However, in the current FY, roughly 3000 deals were finalized. Again, these statistics are neither too disheartening nor encouraging.
Americas: Fintech funding in the territory totaled 39.4 billion USD, depreciating by 34% year on year from 59.7 billion USD. The bulk of invested capital came from the United States. Fintech investments in H221 in the nation totaled 34.9 billion USD, down 30% from 49.7 billion USD.
Europe, the Middle East, and Africa: This part of the world saw 26.6 billion USD in investments, a 16% decrease from 31.6 billion USD the previous year. The drop was caused by a depreciation in M&A transaction values, which slipped from 15.7 billion USD to 7.2 billion USD in a year.
Asia-Pacific: With close to six months remaining in 2022, fintech funding in the region reached a new high of 41.8 billion USD, fueled primarily by Block’s $27.9 billion acquirement of Australia’s Afterpay. China’s fintech funding has stayed subdued. Fenbeitong, an organizational expense planning company, raised 140 million USD in the biggest deal in Asia-Pacific.
This indicates that many fintechs have had a difficult start to the year, thanks to global drop in deals and financing. Added to this was the invasion of Ukraine by Russia, Energy crisis in Europe and inflation that has made investors look for companies with cash fow and those already on the path to profit.
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