KPMG’s H2’24 Pulse of Fintech report reveals a significant decline in global fintech investment, marking the lowest level in seven years. The sector saw $95.6 billion invested across 4,639 deals, highlighting a continued downturn fueled by macroeconomic challenges, geopolitical tensions, and valuation concerns.
Investment fell from $51.7 billion in H1’24 to $43.9 billion in H2’24, though Q4’24 showed some recovery, with fintech funding rising from $18 billion in Q3 to $25.9 billion. M&A deal value and VC investment also increased quarter-over-quarter.
Regionally, the Americas led with $63.8 billion across 2,267 deals, primarily driven by $50.7 billion in the US. EMEA followed with $20.3 billion, while APAC recorded $11.4 billion. Payments attracted the most investment ($31 billion), with digital assets ($9.1 billion) and regtech ($7.4 billion) trailing behind.
Despite a challenging year, investment momentum is expected to build in 2025, fueled by interest rate cuts, lower funding costs, and regulatory clarity. AI-driven regtech and cybersecurity are poised for strong investor interest, while digital tokenization and stablecoins are expected to drive growth in digital assets.
“If what we’ve seen in the broader investment space is any indication, AI could be a sleeping giant for fintech investment,” says Anton Ruddenklau, KPMG International. “Over the next year, AI-focused regtechs will likely see the most traction among investors.”