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Financial tech companies forced to diversify, finds KPMG study

March 1 2020: KPMG International’s  bi-annual report on global and regional fintech investment trends -- Pulse of Fintech H2’2019 -- finds that global fintech investment in 2019 fell just shy of 2018’s record with $135.7 billion invested globally across 2,693 deals.
The main theme for 2019’s global fintech market was diversity – with fintechs and fintech investment expanding across product, sector and geographic borders. The expanding definition of fintech and its increasing reach and interconnectivity helped keep fintech investment robust despite the global economic and trade challenges that hindered growth in 2019.
Key highlights from India

  • India closes out 2019 with a record-setting quarter of fintech investment
  • India sees surge of over $3.7 billion in investments driven by mature fintechs
  • Total fintech investment in India skyrocketed to a new high in 2019, propelled by a record Q4’19 which saw $2.3 billion in fintech investment in the country
  • Payments continued to be the hottest areas of the fintech market in India
  • Insurance was also a hot ticket in 2019
  • Fintech is expected to remain hot for the foreseeable future given the country’s large unbanked and underbanked population

Key Global Highlights

  • Global fintech investment fell short of 2018’s record year, with $137.5 billion invested in 2019 compared to $141 billion in 2018
  • Global corporate VC investment participation rose during every quarter of 2019, leading to $16.7 billion in total annual VC invested with CVC involvement; CVC-related deal volume was also robust, with 553 deals over 2019, including 166 in Q3’19 – the second-highest quarter ever in terms of CVC fintech deals volume after Q2’18
  • Cross-border M&A held strong at $54.2 billion in deal value – despite ongoing global trade tension
  • The number of fintech deals by global tech giants increased for the fifth straight year, with $3.5 billion invested across 46 deals in 2019
  • Cybersecurity related fintech investment more than doubled year-over-year, from $316.9 million to $646.2 million.
  • Proptech investment rose to a record high of $2.6 billion in 2019 from $1.9 billion in 2018.