European FinTech investment grew to a new high of $58.1bn in 2019, the majority of which was secured in the UK.
UK FinTech investment grew to $48.5bn last year, or 83% of the total sum, according to figures from a new KPMG report.
The boost to both UK and European figures was largely due to a single deal in March 2019, which saw US-based FIS invest $43.6bn in cash and stock to acquire London-headquartered Worldpay. That deal almost doubled the UK’s total 2018 investment of $25.4bn.
KPMG’s bi-annual report on global and regional FinTech investment trends reports that elsewhere in Europe, France saw a ‘banner year’ with $1.8bn of total investment. Germany saw $1.6bn of investment led by the $470m raise by mobile bank N26 in third quarter of 2019.
Globally, the report shows a total of $135.7bn in FinTech funding in 2019 across 2,693 deals. This was less than was invested in 2018, but set a record of $77.1bn in the third quarter.
Proptech, a sub-sector of FinTech, saw investment grow to a record $2.6bn, and FinTech-focused cybersecurity investment more than doubled from to $646.2m in 2019. Elsewhere, blockchain and cryptocurrency investment continued to fluctuate, falling from $6.3 billion to $4.7 billion year-over-year.
“2020 is going to be an exciting and pivotal year for FinTech, particularly as we start to see the impact of the digital banking licensees in Hong Kong (SAR), Australia and Singapore launching and endeavouring to scale, as well as other markets following suit,” said Ian Pollari, Global Co-Leader of Fintech, KPMG International.
“In addition, a number of companies from outside of financial services are working to get into parts of the financial services value chain – either directly or through partnerships – and they’re going to blur the lines of financial services even more. As a result, we expect to see bolder responses from incumbent financial institutions in terms of partnerships, as well as strategic investments and M&A.”
The Pulse of Fintech H2’2019 predicts that 2020 will see tech giants such as Alphabet, Alibaba increasing their focus on the FinTech space, both working to increase their reach into developing markets and to increase the value and seamless of their ecosystems to their customers.
It also projects increased consolidation, with ‘bigger and bolder’ M&A deals becoming the norm in the more mature FinTech sub-sectors.
It suggests that 2020 will also see an increased focus on open data opportunities beyond banking and into other aspects of the financial services industry.