Global fintech investment subdued in H1 19, but big M&A deals loom on horizon: KPMG

New Delhi [India], Aug 5 (ANI): Global fintech funding got off to a slower start during the first half of 2019 with 37.9 billion dollars of investment globally across 962 deals, according to consulting major KPMG.
The first half of 2019 is trending downward at the halfway mark, reflecting a pull-back in mega-deals compared to 2018, it said in the bi-annual report titled 'The Pulse of Fintech 2019.'
Large mergers and acquisitions (M&As) and buyouts accounted for the biggest deals to date in 2019, including a 6.9 billion dollar buyout of Dun & Bradstreet in the United States, a 6 billion dollar buyout of Concardis in Germany and a 1.3 billion dollar buyout of France-based eFront.
Other massive deals appear likely to close in the near future, including Fidelity's acquisition of Worldpay (43 billion dollars), Fiserv's acquisition of First Data (22 billion dollars) and the merger of Global Payments with Total System Services (21.5 billion dollars).
The diversity of jurisdictions attracting significant fintech funding continued to grow with big deals during the first half of 2019 coming from France, Argentina, Canada, China, Germany, and the United States. The diversity of locations likely helped to keep fintech investment relatively strong despite the lack of large deals in any one jurisdiction.
Fintech investors across jurisdictions remained focused on a smaller number of large deals, similar to investment trends seen more broadly.
"The introduction of open banking is emerging as a significant driver of fintech investment along with the opportunities presented by technologies like machine learning and AI," said Ian Pollari, Global Fintech Co-Leader at KPMG International.
"We're seeing the growth of sectors like wealthtech and proptech in addition to increasing participation from the big tech companies looking to leverage the deep customer information they have to expand their reach into financial services."
Global fintech investment dropped off last year's pace from 120 billion dollars in 2018 to only 37.9 billion dollars mid-way through 2019. This decline might be short-lived given the massive M&A deals on the horizon.
Corporate-participatory venture investment, which reached an astounding 25.3 billion dollars in 2018, fell to just 4.75 billion dollars in H1 19 as corporates and their venture arms took a pause from large deal activity.
Private equity (PE) firms maintained the torrid pace of investment set in 2018 -- propelled by the continued maturation of the fintech sector and resulting investment opportunities in category leaders. Global PE investment reached over 1.9 billion dollars in the first half of the year.
There has been a pronounced decline in overall investment into the blockchain and cryptocurrency sectors so far this year, with investment dropping from 5 billion dollars across 586 deals in 2018 to only 1 billion dollars across 171 deals in H1 19.
Insurtech investment volume dropped dramatically over the first half of 2019 as early-stage funding sank. Total investment in insurtech dropped from 7.6 billion dollars in 2018 to only 1.1 billion in H1 19. (ANI)