The value of fintech deals worldwide during the first six months of this year declined to $22bn which is a significant decrease when compared to the $31.2bn spent during the same period a year earlier. At the same time though, the number of global deals increased by two percent to 1,561 during the first half of this year.
The largest fintech investment of last year was made by Ant Financial Services, which operates Alipay and is an affiliate of Alibaba Group, and the firm raised $14bn during the first half of 2018. According to Accenture, global fintech investments would have increased by 28 percent during the first half of this year if it wasn't for the deal made by Ant Financial Services.
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The US remained the largest market for fintech transactions and investments increased by 60 percent to $12.7bn during the first half of 2019. In the UK, investment almost doubled to $2.6bn while Germany, Sweden and France also reported strong gains.
Global fintech investments
Senior managing director for Accenture's Financial Services department, Julian Skan explained how fintech fundraising could likely soon reach a plateau, saying:
“There’s been a lot of interest and demand from consumers for new fintech propositions, particularly in the UK and elsewhere in Europe. Fundraising is also moving to support the scaling up of challenger and collaborative fintech, which will cause lumpiness in some [funding] rounds. However, the question is: How long can that last? Fundraising is likely to reach a plateau soon and will most likely dip going forward.”
The trade war between the US and China had a big effect on Chinese fintech investments which fell by almost half to 79 transactions when compared with the 155 fintech deals made in the country during the first half of 2018. China played a big role in driving global fintech funding during 2018.
The total amount of fintech investments in China was $820m during the first half of the year which is quite low when compared to the $17.7bn invested during the first half of 2018. Without the Ant Financial transaction, fundraising in China fell by 79 percent during the first half of this year.
If the trade war between the US and China were to come to an end, we could see an increase in fintech funding but that is highly unlikely given that both countries are reluctant to finalize a deal.
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Via South China Morning Post (opens in new tab)