KPMG has found that global fintech funding rose by 120 percent to $111.8B in 2018 from $50.8B in 2017, mainly driven by mega M&A and buyout deals such as Blackstone’s $17B investment in Refinitiv in H2’18 and the $12.86B acquisition of WorldPay by Vantiv in H1’18.
Other notable deals include the $3.5B acquisition of Blackhawk Network by Silver Lake and P2 Capital Partners, the $3.4B buyout of VeriFone by Francisco Partners, and the $2.2B acquisition of iZettle by PayPal. While fintech deal volume declined in the second half of 2018, the year totaled 2,196 deals, up from 2,165 in 2017.
Ian Pollari, Global Co-Lead at KPMG Fintech, commented:
“The growing deal sizes, higher levels of M&A activity and the geographic spread of deals all highlight the increasing maturation of the fintech sector on a global scale. Fintech start-ups in markets as diverse as Germany and Brazil are attracting larger and later stage rounds, while the more established fintech leaders in the US, UK and Asia are making their own investments and acquisitions in order to expand their product and geographic reach.”
Anton Ruddenklau, Global Co-Lead, KPMG Fintech, added:
“Beyond new fintech-fueled business models, the increasing regulatory and legal obligations emanating from PSD2, GDPR and other regulations are impacting both established players and emerging fintechs. As a result, there is increasing interest in technologies – like AI and machine learning – that can be used to help manage compliance requirements more effectively. There’s little doubt that technology investment is going to go up, up, up.”
2018 was a year of multiple record highs across fintech investment, including VC, corporate VC, M&A and PE, according to KPMG.
Increasing geographic diversity of fintech VC funding continues to help drive deal volume, even as larger fintech hubs see more concentrated investment in larger deals.
Mega deals drove a record $111.8B global fintech investment in 2018, led by three $10B+ deals, as well as an additional 14 $1B+ M&A deals. The US accounted for the bulk of Fintech investment in the Americas: $52.5B across 1,061 deals ou t of a total $54.5B across 1,245 deals.
The APAC region accounted for $22.7B, up from $12.5B in 2017, with Ant Financial‘s record-setting $14B deal in Q2’18 representing over half of the volume.
Canada and Brazil continue to expand fintech investment