September 20, 2022

Pulse of Fintech H1’22

  • Irish fintechs attract $259 million in transactions and investment in H1’22, a significant drop from record-breaking €900 million in H1’21, according to KPMG Pulse of Fintech H1’22 report.
  • Two main Irish deals include Wayflyer raising $150m in a Series B funding round and TransferMate securing $70 million in a funding round
  • Global fintech investment also dropped from $111.2 billion across 3,372 deals in H2’21 to $107.8 billion across 2,980 deals in H1’22.

Ireland’s fintech sector attracted $259 million in M&A, venture capital and private equity transactions across 13 deals in the first half of 2022, according to the latest KPMG Pulse of Fintech H1’22, a bi-annual report tracking global fintech VC, PE & M&A investment trends. The investment is a significant drop from the record-breaking €900 million for the same period last year, when three large deals drove the record investment level. Fintech investment in Ireland has averaged just over $277 million for the same period during the previous five years. Two deals drove investment levels, including Wayflyer raising $150m in a Series B funding round and TransferMate securing $70 million in a funding round.

Other notable deals included the $16.5 million buyout of Dublin-based treasury management software company Salmon Software by Irish private equity firm Melior Equity Partners. Salmon Software employs 30 staff across its operations in Ireland and the Czech Republic. Stanhope Financial Group also raised $10 million in a Series A funding round. Gate Ventures led the round, and the company intends to use the funds to develop its product offerings and increase its market share.

Global fintech investment declined from $111.2 billion in H2’21 to $107.8 billion in H1’22 but remained remarkably resilient compared to historical trends, given the challenges affecting the broader investment market, including geopolitical uncertainty, growing inflation, and increasing interest rates.

Speaking about the report findings for Ireland, Anna Scally, Partner and Fintech Lead at KPMG in Ireland said, “Fintech activity in Ireland continues to increase, reflecting the positive ecosystem that has been developed. One of the biggest success stories in 2022 was Wayflyer, which became Ireland’s sixth home-grown tech unicorn and more recently attracted $253m in debt financing for further growth. While H1’22 saw numerous challenges affect the broader investment market, fintech investment is expected to remain somewhat resilient. However, deals could take longer to complete as investors become more critical of opportunities.”

Open banking

Anna added, “Open banking has for some time offered so much opportunity. However, it has been somewhat perceived by incumbents as a regulatory compliance programme, with many banks needing to manage a significant uplift in technology capability to meet the standards. More recently, though, we are seeing this capability being a key focus in how banks, powered by fintech partners, are offering new services that streamline account opening, lending and financial insights”.

EMEA region sees major decline in M&A, but record VC funding

Fintech investment in the EMEA region dropped from $31.6 billion in H2’22 to $26.6 billion in H1’22, driven largely by a 50 percent decline in M&A deal value (from $15.7 billion in H2’21 to $7.2 billion in H1’22). The region saw only two $1 billion+ M&A deals during H1’22: the $3.9 billion merger of Italy-based Nexi and SIA and the $1.8 billion acquisition of UK-based Interactive Investor by Abrdn. While M&A declined significantly, VC investment in the region grew to $16.6 billion in H1’22 – slightly eclipsing the previous record high of $16.5 billion set in H1’21. EMEA also saw a record of $2.7 billion in PE funding in H1’22, including a quarterly record of $2.1 billion in Q1.

H1’22 Global Highlights

  • Global investment in fintech dropped from $111.2 billion across 3,372 deals in H2’21 to $107.8 billion across 2,980 deals in H1’22. The Asia-Pacific region attracted $41.8 billion, while the Americas attracted $39.4 billion – of which the US accounted for $34.9 billion, and the EMEA region attracted $26.6 billion.
  • Global VC investment declined from $66.5 billion in H2’21 to $52.6 billion in H1’22. The Americas attracted $27.2 billion in investment, while EMEA attracted a record $16.6 billion, and the Asia-Pacific region saw $8.7 billion.
  • Global M&A activity was strong in H1’22, with $49.1 billion in deal value, including $31.8 billion in the Asia-Pacific, $10.1 billion in the Americas, and $7.2 billion in the EMEA region.
  • Global PE investment remained steady, with $6.1 billion in investment in H1’22, including $2.7 billion in EMEA, $2 billion in the Americas, and $1.3 billion in the Asia-Pacific.
  • Corporate-participating investment accounted for $25.9 billion in investment during H1’22, including $13.1 billion in the Americas, $8 billion in EMEA, and $4.7 billion in the Asia-Pacific.
  • Payments accounted for $43.6 billion of investment in H1’22, while crypto and blockchain attracted $14.2 billion, regtech attracted $5.6 billion, and insurtech saw $3.8 billion.
  • Global investment in the insurtech sector dropped to $3.8 billion in H1’22 – far off pace to match the $14.8 billion in investment seen during 2021.

Source: KPMG – Pulse of Fintech H1’22 Report
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