Global Fintech Market at Glance

The importance of fintech startups stems from their ability to disrupt traditional financial services and offer consumers more accessible, affordable, and convenient financial products and services.

The global fintech investment took a dip in 2022, decreasing from the previous year's record high of $238.9 billion invested across 7,321 deals to $164.1 billion invested across 6,006 deals in 2022. Despite this, some areas of the fintech sector showed resilience. The payments sector remained the strongest area of fintech investment globally, with $53.1 billion invested compared to $57.1 billion in 2021. Regtech was the only sector to experience growth, with investment in the space rising from $11.8 billion in 2021 to a record $18.6 billion in 2022. However, investment in crypto and blockchain experienced a decline, falling from $30 billion in 2021 to $23.1 billion in 2022, with a particularly sharp drop in the second half of the year following increased scrutiny in the space.

The decrease in global fintech investment was also evident in the drop in M&A deal value from $105.1 billion in 2021 to $73.9 billion in 2022, and global VC investment declining from $122.9 billion to $80.5 billion year-over-year. However, PE growth investment fell less sharply, decreasing from almost $11 billion in 2021 to $9.7 billion in

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2022. Geographically, the Americas attracted $68.6 billion across 2,786 deals in 2022, with the US accounting for $61.6 billion across 2,222 deals, while the Asia-Pacific region attracted $50.5 billion across 1,227 deals, and EMEA attracted $44.9 billion across 1,977 deals.

Although the outlook for fintech investment in H1'2023 is subdued, there is optimism heading into the new year. The report suggests that investors will opt for safer investments, leading to rising M&As among established, larger organisations. Although corporate-participating VC investment globally fell from $62.8 billion in 2021 to $39.6 billion in 2022, the median deal size rose for angel and seed-stage deals (from $1.8 million in 2021 to $2.4 million in 2022) and early-stage VC deals (from $5.75 million to $6 million), while falling for laterstage VC deals (from $15 million to $13.9 million).

Despite the decline in investment, experts in the industry remain optimistic about the future of fintech. While the decrease in investment may indicate a slowing down of the sector, it is important to note that fintech is still a growing market with significant potential. Additionally, the pandemic has accelerated the adoption of digital payments and other fintech services, making the industry more relevant than ever. Therefore, many experts predict that fintech will continue to be a hub of innovation and investment in the years to come.