Challenges and opportunities in 2023’s global fintech market 

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The KPMG Pulse of Fintech H2’23 report reveals that the global fintech market faced a series of hurdles in 2023, as total investment dropped to a six-year low of US$113.7 billion across 4,547 deals, down from US$196.6 billion across 7,515 deals in 2022. However, the second half of 2023 showed slight resilience with a marginal gain over the first half, rising from US$55.5 billion in H1’23 to US$58.2 billion in H2’23.

This slight recovery was significantly bolstered by six notable deals exceeding US$1 billion each, including the acquisitions of Black Knight (US$11.7 billion) and Adenza (US$10.5 billion), a private equity raise by Finastra (US$6.9 billion), the buyout of Avantax (US$1.2 billion), and a venture capital raise by Generate (US$1 billion) along with the acquisition of Pismo by Visa (US$1 billion). Despite these highlights, VC investment experienced a downward trend, falling from US$27.5 billion to US$18.8 billion between H1’23 and H2’23.

Regionally, the Americas dominated the fintech funding landscape in 2023, accounting for nearly 70 percent of total investment (US$78.3 billion across 2,136 deals). The United States spearheaded this surge with an investment of US$73.5 billion. In contrast, the EMEA region received US$24.5 billion of total fintech investment across 1,514 deals, and the ASPAC region saw US$10.8 billion across 882 deals.

In terms of sectors, the payments space attracted the highest share of fintech investment globally (US$20.7 billion), albeit at a substantial drop from the US$58 billion in 2022. Meanwhile, proptech and ESG were very hot with investors. Proptech investment soared to a record high of US$13.4 billion in 2023, while ESG-focused fintech investment saw a significant year-over-year increase, rising from US$1.2 billion to US$2.3 billion.

Fintech investment in the Asia-Pacific Region Falls by More than 75 percent
It was an incredibly soft year for fintech investment in the ASPAC region, with only US$10.8 billion of investment across 882 deals in 2023—down from US$51.3 billion in investment in 2022—although the 2022 numbers were buoyed by the US$29 billion acquisition of Australia-based Afterpay.

Fintech investment in India was particularly soft, falling from US$6.8 billion to US$3 billion between 2022 and 2023, although investment also dropped in Singapore—from US$4.5 billion to US$2.2 billion. Fintech investment in China rose year-over-year—from a ten-year low of US$800 million to US$1.9 billion. VC investment in the ASPAC region dropped from US$15.4 billion in 2022 to US$7.8 billion in 2023. Of this, corporates participated in US$4.1 billion of deals.

H2’23 was slightly slower in ASPAC, with fintechs attracting US$3.4 billion in investment. VC raises accounted for the vast majority of investment in H2’23, including by Hong Kong (SAR), China-based Micro Connect (US$458 million) and Singapore-based Boltech (US$246 million)), India-based Perfios (US$229 million), and Japan-based Gojo & Company (US$110.6 million).