2023 was a challenging year for the fintech market, with total global fintech investment dropping from US$196.6 billion across 7,515 deals in 2022 to a six-year low of US$113.7 billion across 4,547 deals in 2023 according to the Pulse of Fintech H2’23—a bi-annual report published by KPMG highlighting global fintech investment trends. Conflicts in Ukraine and the Middle East, the high interest rate environment, and the barren exit environment across regions saw fintech investors holding onto their cash throughout much of the year.
The second half of 2023 showed a marginal gain over the first half, with total fintech investment rising from US$55.5 billion in H1’23 to US$58.2 billion in H2’23. Six $1 billion+ deals contributed significantly to this result, including the US$11.7 billion acquisition of US-based Black Knight by Intercontinental Exchange, the US$10.5 billion acquisition of US-based Adenza by Nasdaq, a US$6.9 billion PE raise by UK-based Finastra, the US$1.2 billion buyout of US-based Avantax by Cetera, the $1 billion VC raise by California-based Generate, and the US$1 billion acquisition of Brazil-based Pismo by Visa. VC investment was not so fortunate — dropping from US$27.5 billion to US$18.8 billion between H1’23 and H2’23.
Regionally, the Americas accounted for nearly 70% of total fintech funding in 2023, accounting for $78.3 billion across 2,136 deals. The US accounted for the lion’s share of this investment ($73.5 billion). Comparatively, the EMEA region saw $24.5 billion of total fintech investment across 1,514 deals, while the ASPAC region saw $10.8 billion across 882 deals. At a sector level, the payments space attracted the largest share of fintech investment globally ($20.7 billion)—although it was a major drop from the $58 billion seen in 2022. By comparison, proptech and ESG were very hot with investors; proptech investment reached a record high of $13.4 billion in 2023, while ESG-focused fintech investment rose from $1.2 billion to $2.3 billion year-over-year.