KPMG’s Pulse of Fintech reports on global fintech investment trends
Global fintech investment dropped in 2023 to a six-year low according to a report by KPMG. Investment fell from $196.6bn across 7,515 deals in 2022 to $113.7bn across 4,547 deals in 2023.
Conflicts in Ukraine and the Middle East and high interest rates are attributed to fintech investors holding onto their cash.
Anton Ruddenklau, global head of fintech and innovation of financial services at KPMG International, said: “The fintech market floundered somewhat in 2023, buffeted by many of the same issues challenging the broader investment climate.
“While there were still good deals to be had, investors were definitely sharpening their pencils—enhancing their focus on profitability.”
Areas of interest
The Americas attracted $78.3bn, nearly 70%, of total global fintech funding, of which the US accounted for $73.5bn.
AI was also a key priority for investors, shown not only in the $12.1bn invested into AI-driven fintechs in 2023 but also through alliances and product spending by financial institutions.
Payments remained the strongest area of fintech investment. Other notable areas include proptech, insurtech, crypto and blockchain, and regtech.
Despite the fall in funding, 2023 was the second-best year for ESG fintech, with $2.3bn invested.
Karim Haji, global head of financial services at KPMG International, said: “The fintech market has been evolving and maturing since it got its start in 2004 and really came into its own in 2008.
“The technology underpinning fintech keeps changing—and right now, we’re seeing it change again with the application of AI and generative AI.
“You could say that we’re coming into the next wave of fintech. While the investment numbers are soft now—due to broader market conditions—the next year could be quite exciting for innovation in the fintech space.”