Overall global fintech funding across M&A, PE, and VC deals soared to a new high in H1’21, increasing from US$87.1 billion in H2’20 to US$98 billion in H1’21. It was also found that cash reserves, hub and sub-sector diversification and strong levels of activity throughout the world contributed to the performance. Fintech valuations remained very high in H1’21 and drove the creation of 163 startups with $1 billion or more in value, or unicorns, in the first half. Corporates were particularly active in venture deals, participating in close to $21 billion in investment over nearly 600 deals globally, with many realising it’s quicker to do so by partnering with, investing in, or acquiring fintechs.
Total fintech investment in H2’21 is expected to remain very robust in most regions of the world. Revenue-based financing solutions, banking-as-a-service models, and B2B services are predicted to attract increasing levels of investment, while the payments space is expected to remain a dominant driver of fintech investment. As there is a rise in digital transactions, which has led to an increase in cyberattacks and ransomware, cybersecurity solutions will likely also be high on the radar of investors.