Deloitte FinTech Market Update

Deloitte's analysis of FinTech industry performance and investment describes hopeful but tough going for the industry since 2021. A strong rebound in fintech investment was seen throughout 2021. Possibly too early to describe the trend as a reversal, the numbers for the first half of 2022 are not favorable versus the same period last year.  Below are some of the highlights, with comparisons to the same period in 2021:

• Fintech investment decreased to $52.9 billion, dropping 24% from $69.6 billion.
• There were a reported 1,198 funding events directed at 902 companies, versus 1,629 funding events across 1,188 fintech companies.
• When compared to H1 2021, a decrease in funding is apparent across all sectors in 2022. BankTechs saw a 14% decrease (i.e. 66% of total investment), InsurTechs saw a 48% decrease (9%), InvestTechs had a 34% decrease (11%) and PropTechs a 34% decrease in funding (14%).
• Companies headquartered in the following five countries made up 76.2% of the total funding in H1 2022: US based companies received $23.9 billion (or 45.1% of the total); followed by those in the UK with $9.0 billion (or 17.0%); India with $3.2 billion (or 6.1%); Brazil with $2.3 billion (or 4.3%); and France with $1.9 billion (or 3.6%).
• M&A deal value saw an uptick, increasing by 52% to $46.4 billion compared to $30.6 billion in H1 2021. But the number of deals fell 12% to 110.
• 6 companies went public in H1 2022, for a total capital raise of $2.1 billion, versus 16 companies and $7.2 billion in the same period last year.
  
• 8 venture capital (VC)-backed fintech launches were disclosed in H1 2022. Overall, the data shows 129 VC-backed fintechs launched in 2021, 266 in 2020, and 350 in 2019.2 Note that these numbers may change in subsequent quarters due to the timing of formally announcing new launches.