VC investment in fintech remains robust as M&A activity stalls: KPMG
Sep 02, 2020
New Delhi [India], September 2 : India continued to see solid fintech investment in the first half of current calendar year despite Covid-19 with total investment activity at 1.05 billion dollars, global professional services firm KPMG said on Wednesday.
This included funding from venture capitals, private equity, and mergers & acquisitions. The deal count was about 38 during the first half. In the second quarter, the fintech investment totalled 647.5 million dollars and the deal count was 32.
While the ongoing pandemic and challenges with international deal-making could put a damper on fintech investment in India in H2, the region is expected to remain a major opportunity for investors over the medium and long-term, said KPMG in its bi-annual report titled 'Pulse of Fintech H1 2020.'
Sanjay Doshi, Partner and Head, and Financial Services at KPMG in India, said fintech-driven financial services especially in lending, insurtech and distribution have been attracting significant investments.
"Covid-19 has in fact fast-tracked the digital economy and significant investments are being made by established banks and insurance companies, which can also lead to acquisition and more investments from investors," he said.
However, said the report, global fintech investment is well behind 2019's total investment of 150.4 billion dollars. At mid-year, total fintech investment globally is 25.6 billion dollars.
The Americas accounted for the largest share of total fintech investment at mid-year with 12.9 billion dollar investment. The Asia Pacific saw 8.1 billion dollars in total fintech investment during H1 20 while Europe, Middle East, and Africa (EMEA) saw 4.6 billion dollars in fintech investment.
The Americas and EMEA are currently on track to see a new record annual high of VC investment in fintech, said the report. At the end of H1 20, the Americas had attracted 9.3 billion dollars in VC investment, Asia 6.7 billion dollars, and EMEA 4 billion dollars.
Corporate VC participating investment remained very strong, accounting for 12.2 billion dollars in fintech investment globally. Global investment in cybersecurity flew past 2019's record high of 592.3 million dollars to reach 870.8 million dollars.
