Global investment in fintech sank to a five-year low of $113.7 billion across 4,547 deals in 2023 as investors pulled back from making large deals amid concerns about stubbornly high interest rates, conflicts in Ukraine and the Middle East, falling fintech valuations, and the parched exit environment, revealed a report by KPMG. Fintech investment in India was particularly soft, falling from $6.8 billion to $3 billion between 2022 and 2023, although investment also dropped in Singapore—from US$4.5 billion to US$2.2 billion.
The Americas attracted the largest share ( 70 per cent) of investment during the year, accounting for $78.3 billion in fintech funding across 2,136 deals — of which the US took $73.5 billion across 1,734 deals — compared to $24.5 billion across 1,514 deals in the EMEA region and $10.8 billion across 882 deals in the ASPAC region.
The second half of 2023 showed a marginal gain over the first half, with total fintech investment rising from $55.5 billion in H1’23 to $58.2 billion in H2’23. Six $1 billion+ deals contributed significantly to this result. VC investment was not so fortunate — dropping from US$27.5 billion to US$18.8 billion between H1’23 and H2’23.
At a sector level, the payments space attracted the largest share of fintech investment globally ($20.7 billion)—although it was a major drop from the $58 billion seen in 2022. By comparison, proptech and ESG were very hot with investors; proptech investment reached a record high of $13.4 billion in 2023, while ESG-focused fintech investment rose from $1.2 billion to $2.3 billion year-over-year.
