Our Q4'16 Pulse of Fintech report analyses global investment data into the fintech sector in 2016, and provides overviews from a global and regional perspective.
Welcome to the Q4'16 edition of KPMG's Pulse of Fintech report. In this report, we highlight key trends and insights related to fintech investment globally and in specific jurisdictions around the world. In addition to examining Q4'16 specific fintech activity, we also look back on 2016 as a whole and discuss the key opportunities and trends for fintech investment in 2017.
Overall, 2016 was a challenging year for fintech investment. The Brexit vote in the UK and ramifications associated with its outcome, the US presidential election, a perceived slowdown in China and significant fluctuations in the exchange rate globally prompted investors to be more cautious.
This caution likely played a part in the significant decline in total investment in fintech globally. The decline reflects major decreases in mergers and acquisitions (M&A) and private equity (PE) funding related to fintech. However, global venture capital investment showed an opposite trend, reaching a new high of US$13.6 billion. The resilience of the VC market for fintech opportunities suggests that fintech will continue to be an attractive sector in the future.
During 2016, investors in a number of regions saw some saturation within the more mature fintech areas, particularly in payments and lending. Enthusiasm for burgeoning fintech areas, however, helped keep interest in fintech high overall. Insurance tech (insurtech), regulatory tech (regtech), artificial intelligence (AI) and data and analytics each drew significant investor attention, with a positive outlook for further growth over the next 12 months.
This report explores these results and a number of other global and regional trends. We also examine a number of questions that are top of mind for fintech investors today, including:
We hope you find this edition of the Pulse of Fintech report informative. If you would like to discuss any of the results in more detail, please contact Anna Scally, Partner and Fintech Lead.