Global fintech investments more than doubled between the first and second halves of 2020, demonstrating the resilience of the fintech sector throughout the Covid-19 pandemic.
In the latest Pulse of Fintech report, KPMG noted that despite a short slowdown in the early months of the pandemic, fintech investments rose from $33.4bn (£23.64bn) in the first half of 2020, to $71.9bn in the second six months of the year.
Overall, there were 2,861 fintech funding deals in 2020, worth a total of $105bn.
“A number of sectors floundered given the challenges of doing business in a pandemic environment,” Anton Ruddenklau, global fintech co-leader, KPMG.
“Fintech, for the most part, was not one of them. Covid-19 has been a catalyst for many fintech business models – a real proving ground given the accelerated demand for digital offerings coming from consumers and businesses alike.
“Payments and e-commerce platforms were particularly hot areas of investment, in addition to cybersecurity, given the increasing use of digital platforms.”
The US accounted for more than 70 per cent of global fintech investments last year. The investment platform Robinhood claimed the largest amount of venture capital money, by raising $1.3bn across two funding rounds.
In Europe, the Middle East and Africa (EMEA), fintech investment fell from $61.5bn in 2019 to $14.4bn. However, there are already signs of a rebound. A record amount of venture capital funding ($3.1bn) was made during the third quarter of 2020, driving annual venture capital investment in EMEA to an all-time record $9.25bn.
Fintech investment in the Asia-Pacific region fell from $16.8bn in 2019 to $11.6bn in 2020 – a six-year low.
China received just $1.6bn in fintech funding last year, representing “a significant decline that may reflect the overall maturity of the nation’s payments sector that has mostly been dominated by local tech giants,” KPMG said.
Fintech funding in Canada recovered in the final quarter of 2020, to reach $438m. Brazil received $506m in fintech investment during the final quarter of last year.