The fintech winter continues to chill the outlook for local firms, says KPMG
The firm's latest Fintech Landscape survey suggests that the fintech winter is not over yet — but there are nonetheless some warmer signs.
The key findings in KPMG’s latest Fintech Landscape survey present a less than encouraging picture for Australia's sector. For the second consecutive year, the number of independent active fintech firms headquartered in the country has declined — dropping 7% over the past 12 months.
KPMG’s head of fintech, Dan Teper, attributed this downturn to several factors: mergers and acquisitions, as start-ups and scale-ups pursue scale and financial sustainability in a tighter funding market; forced sales or closures due to running out of money; and a slowdown in the launch of new fintechs, driven partly by challenging macroeconomic and funding conditions.
“Investment in the sector has consistently fallen since the highs of 2021, and probably the peak in early 2022,” he said. “We would characterise the current market as challenging, especially for those businesses yet to break even to those in the kind of start up and scale up part of their life cycle. It is very challenging.”
This assessment aligns with broader sentiment. Attendees at Fintech Australia’s Melbourne event last week said the major forces were consolidation, retrenchments and the difficulty in raising money for an idea rather than an operating business.
