Samjong KPMG "Global Fintech Investment Expected to Recover This Year"

Shrinking Amid Uncertainty,
Rebound Led by Generative AI and Virtual Assets

Investment in global fintech companies has contracted due to geopolitical risks such as the Ukraine-Russia war and macroeconomic uncertainties. However, there are forecasts that investments will increase this year in areas such as generative artificial intelligence (AI) and virtual assets.

According to the ‘Global Fintech 2024 Investment Results Analysis and Outlook’ report published by Samjong KPMG on the 13th, the scale of global fintech investment in 2024 was $95.6 billion (4,639 deals), marking the lowest level since 2017. In particular, investment concentration was high in the United States (56.2%), the United Kingdom (11.0%), and Canada (10.5%).

The fintech sector also faced difficulties in investment recovery due to a sluggish initial public offering (IPO) market. The amount of investment recovery in fintech companies in 2024 was $37.3 billion, a slight rebound from $28.5 billion the previous year, but the number of recovery transactions decreased for the third consecutive year from 399 deals in 2022 to 367 deals in 2024. The report analyzed that investors are still maintaining a cautious stance.

The scale of global fintech mergers and acquisitions (M&A) deals in 2024 was $49.6 billion, down from $60.2 billion in 2023. Although there was a downward trend in the first quarter ($28.1 billion) and second quarter ($21.6 billion), the fourth quarter ($14.2 billion) showed nearly a twofold increase compared to the third quarter ($7.4 billion), indicating potential for a rebound.

The payments sector achieved the highest investment scale. Although it decreased to $17.2 billion in 2023, it rose to $31.0 billion in 2024. The largest deal in the first half of 2024 was the $12.5 billion buyout of Worldpay (USA).

Global virtual asset investment also increased from $8.7 billion in 2023 to $9.1 billion in 2024, showing signs of recovering investor sentiment. The report forecasted, “With the U.S. administration announcing policies to ease regulations related to virtual assets and to stockpile strategic assets, interest in stablecoins and asset tokenization is likely to expand significantly.”

The scale of global fintech investment increased from $18.0 billion in the third quarter of 2024 to $25.9 billion in the fourth quarter. By region, fintech investment in the Americas totaled $31.0 billion in the second half of 2024, with $20.2 billion executed in the fourth quarter alone. In the EMEA (Europe, Middle East, and Africa) region, $7.3 billion was invested in the second half of 2024, with $4.0 billion recorded in the fourth quarter.

Seho Kim, Partner in charge of the fintech industry at Samjong KPMG, said, “With interest rate cuts and reduced funding costs in major countries, global fintech investment activities are expected to gradually recover.” He added, “This year, fintech investment is expected to increase mainly in areas such as ▲generative AI, ▲B2B solutions, and ▲STO (security token offerings) and virtual assets.”

He further emphasized, “Companies need to closely examine and monitor the impact of U.S. trade and monetary policies on financial markets, along with trends in the use of AI-based solutions including data management and data governance.”