KPMG – Pulse of Fintech, 2023

The year 2023 proved to be challenging for the global fintech market, with both total investment and the number of deals hitting their lowest levels since 2017. This decline was attributed to a combination of global challenges and concerns regarding valuations and exit opportunities. Fintech investors became more cautious and scrutinized potential deals for profitability, avoiding down rounds. The Asia Pacific region experienced the largest drop in investment, followed by Europe, Middle East, and Africa, while the Americas showed greater resilience. The payments sector continued to attract the largest share of funding, despite a decrease in investment. The subsectors of proptech and insurtech saw an increase in investment. AI remained a frontrunner in technology focus, attracting significant investment. Looking forward to the first half of 2024, global fintech investment is expected to remain relatively soft initially but pick up as interest rates decrease. AI and B2B solutions are expected to continue being key areas of focus, and M&A activity is anticipated to rise as investors seek opportunities in distressed assets. Start-up and seed/pre-seed funding, however, have seen a rise in the number of deals completed, showcasing investors' interest in testing and learning about new fintech business models. Companies in the fintech sector are advised to enhance profitability and ensure long-term sustainability.