US fintech slides, Asia and Europe rise says KPMG
Last year was a challenging one for fintech. The Brexit vote, the US presidential election, the slowdown of the Chinese economy, and fluctuations in exchange rates forced investors to tread cautiously, according to KPMG’s latest report “The Pulse of Fintech Q4 2016”.
Despite a decline in overall fintech investments, 236 M&A transactions were recorded worth $11.15 billion and VC investments totalled $13.6 billion across 840 deals in 2016, according to KPMG. Corporate VC arms also played an active role in the fintech space last year, with 145 rounds and $8.5 billion in investment value.
In the US, the total amount invested declined by about 50%, and M&A deals brought in $8.2 billion. Total investments dropped to $12.8 billion in 2016, compared to $27 billion in 2015. Despite the decline in funding, KPMG believes the future is bright for fintech firms in the US as interest in the area is growing and industry partners are building collaborative partnerships.
Asia and Europe, on the other hand, enjoyed the confidence of investors who chose to give money to fintech start-ups in the region. Asia recorded $7.1 billion in fintech financing and Europe saw investments grow in volume – from 230 deals in 2015 to 242 deals in 2016.
A lot of the growth experienced by Asia was fuelled by investments into China, but a strong regulatory focus and support for fintechs in Singapore and India boosted investor confidence as well.
KPMG also identified Nordic countries as an emerging hotspot for fintech, which is expected to draw more investments into Europe in the future.
The global insurance technology space experienced growth in 2016 with 91 deals worth about $1.2 billion, up from 74 deals in 2015 that brought in about $590 billion.
By Soumik Roy, editorial contributor to Banking Technology