KPMG Publishes '2023 Fintech Trends Report'
"Proptech Investment Tripled Last Year...Record High"
Last year, global investment in the Proptech sector increased more than threefold from $4.1 billion to $13.4 billion, setting a new record high. Proptech is a portmanteau of Property and Technology. This is interpreted as a result of the fintech industry focusing on cross-industry collaboration to expand customer touchpoints.
According to the report (Pulse of Fintech H2'23) published on the 7th by global accounting and consulting firm KPMG, global fintech investment amounted to $113.7 billion across 4,547 deals last year. This is a decrease from 7,515 deals and $196.6 billion in 2022. The causes are attributed to rising interest rates, other macroeconomic factors, and valuation mismatches between buyers and sellers.
Looking at recent changes in fintech investment in major countries, cross-industry convergence investment expanded significantly from 5% in 2019 to 21% last year. The Proptech sector saw a substantial increase with investment exceeding $13.4 billion last year. Investment in Insurtech also rose sharply to $8.1 billion last year after hitting a low of $5.9 billion in 2022. In the second half of last year, it secured venture capital (VC) funding exceeding $100 million.
By region, the Americas accounted for about 70% of total fintech funding with $78.3 billion in 2023. In the Europe, Middle East, and Africa (EMEA) region, funding plummeted from $49.6 billion in 2022 to $24.5 billion last year due to a slowdown in the exit market and geopolitical uncertainties, marking the lowest level in the past seven years. Fintech investment in the Asia-Pacific region dropped by more than 75% compared to the previous year. While $51.3 billion was invested across 1,537 deals in 2022, last year recorded $10.8 billion across 882 deals. This appears to be influenced by economic downturns and geopolitical conflicts in China and Hong Kong (SAR), as well as changes in policy direction regarding fintech.
Jae-bak Cho, Deputy CEO of Samjong KPMG and a fintech leader, said, “Although the fintech market contracted significantly last year due to economic uncertainties, investment in Proptech and the insurance sector increased remarkably.” He added, “From the perspective of securing customer touchpoints and creating future value, investment in fintech that combines finance with other industries such as real estate, healthcare, and commerce will further expand.” He also noted, “This year is a crucial time for policy support and incentives to promote the discovery and differentiation of fintech business models incorporating AI, ESG (Environmental, Social, and Governance), and cybersecurity.”
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