Fintech investments in India reach more than $ 2 billion in the first half; record global venture capital funding too: KPMG
India nearly matched its total investment in FinTech in 2020, with $ 2 billion investment in H1 21. Digital banking was a big game in India, but with a unique model compared to others. jurisdictions in the regions – with digital banks acting primarily as SaaS providers and regulatory responsibility remaining with banking partners, according to KPMG Pulse of Fintech, a semi-annual report on investment trends in FinTech.
The early fintech leaders in India continued to extend their business models to adjacencies to bring more value to their clients, such as payments players who acquire insurtechs. Insurtech is an area of growing interest for investors in India; in the first half of 21, several insurtechs raised mid-size VC or PE financing rounds, according to the report.
Commenting on India’s findings, Sanjay Doshi, Partner and Head of Financial Services Advisory at KPMG India, said: “India’s exits will increase, both in terms of IPOs and in terms of acquisitions. On the M&A front, fintechs could be targeted by banks, larger fintechs, or even a fintech services conglomerate. Over the next 12 months, we expect the major fintech unicorns to try to tap into the strong capital market by considering an IPO. Banks are also keen to partner with fintechs, especially neo-banks and wealth technology platforms ”.
Global FinTech Financing
Overall, global fintech financing for M&A, private equity and venture capital operations has reached a new high. Dry powder liquidity reserves, the growing diversification of hubs and sub-sectors and strong activity across the world contributed to the record start of 2021, with funding increasing from $ 87 billion in H2’20 to $ 98 billion. dollars in H1’21.
Fintech valuations remained very high in the first half of 21, as investors continued to view the space as attractive and performing. This likely led to the explosion of unicorn births in the first half of 2021.
Under pressure to accelerate their digital transformation and improve their digital capabilities, companies have been particularly active in venture capital transactions, participating in nearly $ 21 billion in investments across nearly 600 transactions worldwide. , many realizing that it was faster to do so by partnering with, investing in or acquiring fintechs.
Global investments in FinTech reached $ 98 billion out of 2,456 deals in the first half of 21, far exceeding the annual total of $ 121.5 billion out of 3,520 deals last year. Total fintech investment in the Americas has been very strong with over $ 51 billion invested in 1,188 deals.
The EMEA region recorded $ 39.1 billion in fintech investments in the first half of 21. Fintech investments in the Asia-Pacific region continued at a more moderate pace, reaching $ 7.5 billion out of 467 transactions, compared to $ 13.4 billion out of 714 transactions during the whole of 2020.
Mergers and acquisitions continued at a very strong pace, representing $ 40.7 billion out of 353 deals in H1’21, compared to $ 74 billion out of 502 deals in 2020
Valuations of late-stage companies more than doubled year-on-year
Late-stage venture capital valuations more than doubled year over year, with global pre-money median valuations for late-stage transactions rising from $ 135 million in 2020 to $ 325 million at the end of the first semester 21
Private equity firms embraced the fintech space in the first half of 21, contributing $ 5 billion in fintech investments, surpassing the previous annual record of $ 4.7 billion recorded in 2018.
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Posted on: Wednesday August 11, 2021 12:39 IST