The Pulse of Fintech – Q4 2016 | KPMG | AU

The Pulse of Fintech – Q4 2016

The Pulse of Fintech – Q4 2016

The following infographics provide a global and regional overview of key findings uncovered from The Pulse of Fintech Q4’16, created by KPMG Enterprise and KPMG Fintech.

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National Sector Leader, Banking and Global Co-leader, KPMG Fintech practice

KPMG Australia

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Overview

KPMG's first Pulse of Fintech report for 2017 analyses global fintech investment for Q4'16 and total investment levels for 2016. Recognising the growth of the fintech sector, the report now covers an expanded research of all investment classes – M&A, Private Equity (PE), as well as Venture Capital (VC) investments.

After 2015’s record-setting US$46.7 billion in global funding to fintech companies, 2016 brought reality back to the market with an almost 50 percent slide in fintech investment. The 2016 annual fintech funding total of US$24.7 billion was significant compared to pre-2015 investment levels.

We explore these results and a number of other global regional and Australian trends in this report. We also examine a number of questions that are top of mind for fintech investors today, including:

  • Will lending and payments continue to attract the most investment?
  • Will insurtech and regtech become the next big fintech hot spots?
  • What are regulators doing to open the door for fintech innovation?
  • How is fintech expected to evolve in 2017?

Global and regional snapshot (infographic)

The following infographics provide a global and regional overview of these findings and other key developments uncovered from the report.

Key 2016 global fintech highlights

  • M&A and private equity (PE) fintech deals dropped considerably in 2016, while VC funding to fintech companies reached a record US$13.6B compared to US$12.7B in 2015, with 840 deals recorded.
  • Global investment in insurance technology (Insurtech) companies surged ahead, crossing the $1bn mark for the first time in history, more than doubling the US$590M in investment recorded in 2015. Insurtech is predicted to continue the strong growth witnessed in 2016 as the insurance industry plays catch-up with the innovations seen in the banking industry.
  • Global venture investment in bitcoin and blockchain technologies reached a high of US$543M in 2016, compared to US$441M in 2015; however, the deceleration in deal count of 132 versus 191 deals closed in 2015 likely signifies that some initial hype in blockchain is fading and greater evidence of robust applications will be required for future investment.

Key Asia-Pacific highlights

  • In Australia, overall fintech investment hit a record high of US$656M across 25 deals in 2016, up from US$185M across 23 deals in 2015. This was driven by large M&A and VC transactions – CHAMP Private Equity acquisition of Pepperstone, Stirling Products’ acquisition of Mx360Group, as well as large funding rounds from Tyro and Prospa.
  • Ant Financial’s US$4.5B financing lifted Asia to an all-time high US$8.6B in overall fintech investment. Mega-financings such a JD Finance and Lu.com will continue to dominate the Asian investment scene as institutional capital finds its way into alternative investments.
  • Payments and Wealth Management are dominating the Asian fintech space, at least at the top end of the market. Of the top 10 deals in the region, seven fell into the Payments or Wealth Management verticals.

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

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