Aussie fintech investment fell 13% in first half: KPMG report
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The news: The first half of 2024 proved "challenging for the fintech market globally", but sentiment could be starting to improve, according to KPMG's latest 'Pulse of Fintech' report.
The numbers: Total global fintech investment fell from $62.3 billion across 2,287 deals in the second half of 2023, to $51.9 billion over 2,255 deals in the first half of 2024, the report said.
Australia recorded $470 million worth of investments across 39 deals, a drop of 13% in deal value and 9% in deal count compared to the previous half of the year. However, the latest data highlighted an uptick in deal value from $157 million to $313 million quarter on quarter.
Notable Australian fintech deals included Camms, a risk and compliance software developer, being purchased for $150 million by Riskonnect. Bridging loan startup Bridgit raised $140 million across equity and debt; tech and operations company Constantinople raised $33 million in a Series A; and payments company Till Payments was acquired for $32 million by Canadian fintech Nuvei Corporation.
Rich Data Co. also raised $25 million in a Series B, Avenue Bank raised $18 million in a Series D and Illuvium raised $12 million in a Series A.
The context: The KPMG report said the Asia Pacific region saw its slowest quarter of fintech investment since 2017, with "much smaller" deal sizes accounting for the decline.
It noted that fintech investment is expected to remain subdued globally into the second half of 2024 given the high interest rate environment and resulting high cost of capital, in addition to the approach of the US presidential election.
"AI will likely be the hottest area of investment" it noted, as startups work to tailor AI solutions specifically to the financial services sector.
"There is some optimism that deal volume will continue to increase, but average deal sizes will likely remain small compared to historial norms," the report said.
What they said: Daniel Teper, head of fintech at KPMG Australia, said: "Whilst deal values and volumes continues to disappoint, we remain cautiously optimistic, and it is hoped that recent quarter on quarter growth and monetary easing in other global markets will act as a catalyst for improved investor sentiment and activity".
The source: KPMG media release
