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Global fintech investment halves in 2016

Global investment in fintech companies has seen an almost 50 per cent year-on-year decline, but the Australian fintech sector has seemingly bucked the trend, says KPMG.

According to the latest KPMG Pulse of Fintech report, released yesterday, global investment in fintech reached US$24.7 billion in 2016, down from US$46.7 billion in 2015.

Reduced M&A activity and private equity deals were said to be the main factor in the global decline, while venture capital investment remained strong, actually reaching a new high of US$13.6 billion, up from US$12.7 billion in 2015.

However, the report also made clear that the total global funding figures are “still significant compared to pre-2015 investment levels”, indicating 2016 saw a particularly pointed spike for fintech investment, rather than a new normal.

Despite the global figures, the Australian fintech sector fared much better, the report revealed, with an overall investment of US$656 million into Australian fintech in 2016 across 25 deals, up from US$185 million across 23 deals in 2015.

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Successful funding rounds by Tyro and Prospa were listed as factors resulting in a strong year for Australian fintech, alongside the acquisition of Pepperstone by CHAMP Private Equity.

“In just five years, Australia has seen the creation of a healthy and active fintech sector, from an extremely low base of just $51 million of fintech investment in 2012 to exceed $600 million in 2016,” said Ian Pollari, global co-leader of fintech at KPMG, commenting on the findings.

“While mega deals result in peaks and troughs in overall figures, the trend is clear and demonstrates increasing interest and investment activity in fintech.”

[Related: Don't get distracted by fintech 'toys': APRA]

Global fintech investment halves in 2016

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>According to the latest KPMG Pulse of Fintech report, released yesterday, global investment in fintech reached US$24.7 billion in 2016, down from US$46.7 billion in 2015.

Reduced M&A activity and private equity deals were said to be the main factor in the global decline, while venture capital investment remained strong, actually reaching a new high of US$13.6 billion, up from US$12.7 billion in 2015.

However, the report also made clear that the total global funding figures are “still significant compared to pre-2015 investment levels”, indicating 2016 saw a particularly pointed spike for fintech investment, rather than a new normal.

Despite the global figures, the Australian fintech sector fared much better, the report revealed, with an overall investment of US$656 million into Australian fintech in 2016 across 25 deals, up from US$185 million across 23 deals in 2015.

Successful funding rounds by Tyro and Prospa were listed as factors resulting in a strong year for Australian fintech, alongside the acquisition of Pepperstone by CHAMP Private Equity.

“In just five years, Australia has seen the creation of a healthy and active fintech sector, from an extremely low base of just $51 million of fintech investment in 2012 to exceed $600 million in 2016,” said Ian Pollari, global co-leader of fintech at KPMG, commenting on the findings.

“While mega deals result in peaks and troughs in overall figures, the trend is clear and demonstrates increasing interest and investment activity in fintech.”

[Related: Don't get distracted by fintech 'toys': APRA]

Global fintech investment halves in 2016
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