Global fintech market sees $51.9 billion in total investment in H1’24.
Global fintech market sees $51.9 billion in total investment in H1’24.
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Global fintech market sees $51.9 billion in total investment.
Total global fintech investment slides in first half of year
Global investment in fintech across VC, PE and M&A fell from $62.3 billion across 2,287 deals in H2’23 to $51.9 billion across 2,255 deals in H1’24. At a regional level, every key jurisdiction saw total fintech investment slide; in the Americas, total investment dipped from $38.5 billion to $36 billion, while in Europe, Middle East and Africa, it fell from $19.1 billion to $11.4 billion, and in ASPAC it dropped from $4.6 billion to $3.7 billion.
Americas and ASPAC both see pickup in deals volume
Fintech deal volume globally held nearly steady at 2,255 in H1’24. Both the Americas and ASPAC saw deal volume increase between H2’23 and H1’24—from 1,066 to 1,123 in the Americas and from 406 to 438 in ASPAC—while the EMEA region saw deal volume decline from 804 to 689.
Fintech M&A investment ahead of 2023’s pace, PE well behind
While soft compared to the outlier high of $172 billion in 2019, global fintech M&A investment at the end of H1’24 was somewhat ahead of the pace seen last year—with $32.6 billion in deal value compared to the $58.8 billion seen during all of 2023. PE investment, meanwhile, is well behind the pace seen last year—with just $979 million in global PE investment at midyear, compared to $9.6 billion in 2023.
Three largest fintech deals of H1’24 spread across Americas and Europe
While the US accounted for the largest fintech deal of H1’24—the $12.5 billion buyout of a majority stake in payments processing firm Worldpay by GTCR1—Canada and the UK attracted the next two largest deals; Canada-based payments processing company Nuvei was taken private by PE firm Advent International in a $6.3 billion deal,2while UK-based financial software firm IRIS Software Group was bought out by Leonard Green.3By comparison, ASPAC saw much smaller deal sizes; China-based Yi-an Enterprise saw the region’s largest deal—a $280 million Series B VC raise.
With interest rates slow to drop, big deals remain illusive
During H1’24, the European Central Bank, the Bank of Canada, and the Swiss National Bank began to make cuts to interest rates, which rose dramatically during 2022 and 2023. While a positive move, interest rate cuts have been conservative to date and key jurisdictions—including the US and UK—have not followed suit. Given the high cost of capital and concerns about valuations and returns, fintech deals have been slower to materialize, particularly at largest dealsizes. Within the VC market in particular, the fintechs that raised larger during H1’24 leaned heavily towards more mature companies looking to raise scaling capital.
Payments dominates fintech investment globally, attracting over $21 billion in H1’24
The payments sector remained the dominant sector for fintech investment during H1’24, attracting $21.4 billion in investment—only slightly less than the $22.7 billion in payments-focused deal value seen during all of 2023. The buyouts of Worldpay and Nuvei, however, accounted for $18.8 billion of this total. Within the payments space, there was growing interest in use-case driven payments companies, including startups focused on finding ways to add value in very specific areas of the financial services market—such as payments insurance, unsecured lending, and insurance claims.
AI remails a major priority for fintech investors
Following broader investment trends, AI continued to be a very hot area of interest to fintech investors, particularly in the US. During H1’24, the US saw four large AI-focused fintech deals. Cyber insurance company Corvus was acquired by Travellers for $427 million,4compensation-focused platform Spiff—was acquired by Salesforce for $419 million5and corporate management company Ramp and investment management platform FundGuard raised $150 million and $100 million VC funding rounds, respectively. China-based AI-powered sustainability data company MioTech also raised $150 million during H1’24.
Trends to watch for in H2’24
- Larger focus on Central Bank Digital Currencies (CBDC) and regulated stablecoins.
- Increasing interest in middle and front office solutions related to investment management.
- Growing investor focus on AI-powered fintech offerings, including in emerging areas like behavioural intelligence.
- Increasing investor attention on less traditional fintech markets, including Africa and parts of Southeast Asia—such as Indonesia and the Philippines.
- ESG fintech continuing to gain attention, particularly in areas like carbon measurement and tracking.
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Footnotes:
[1] FIS. (2024, February 1). FIS completes sale of majority stake of WorldPay to GTCR [Press release]. Retrieved July 19, 2024, from https://www.fisglobal.com/about-us/media-room/press-release/2024/fis-completes-sale-of-majority-stake-of-worldpay-to-gtcr
[2] Reuters. (2024, April 1). Advent to buy Ryan Reynolds-backed fintech Nuvei in $6.3 bln deal [Press release]. Retrieved July 19, 2024, from https://www.reuters.com/markets/deals/advent-buy-ryan-reynolds-backed-fintech-nuvei-63-bln-deal-2024-04-01/
[3] Gopinath, S. (2023, December 23). Leonard Green to buy Iris Software Stake at £3.2 billion value. Bloomberg. Retrieved July 19, 2024, from https://www.bloomberg.com/news/articles/2023-12-23/leonard-green-to-buy-iris-software-stake-at-3-2-billion-value
[4] Business Wire. (2024, January 2). Travelers completes acquisition of Corvus Insurance. Yahoo Finance. Retrieved July 19, 2024, from https://finance.yahoo.com/news/travelers-completes-acquisition-corvus-insurance-211500615.html
[5] Spiff. (2024, February 1). Salesforce signs definitive agreement to acquire Spiff | Spiff. https://spiff.com/press-release/salesforce-acquisition/
