Pulse of Fintech h1 22

Pulse of
September 2022
home.kpmg/fintechpulse
Shifting market dynamics
The optimism that permeated the fintech market at the end • ongoing strength of payments sector across numerous KPMG Fintech professionals include
of 2021 quickly transformed into concerns about a potential jurisdictions partners and staff in over 50 fintech hubs
around the world, working closely with
recession in H1’22 as uncertainties related to the Russia-
• increasing focus on automation and extreme automation financial institutions, digital banks and
Ukraine conflict, ongoing supply chain challenges, and fintech companies to help them
in cybersecurity given the ever-increasing number of
rising inflation and interest rates took their toll on public understand the signals of change, identify
issues in need of investigation
and private companies alike. the growth opportunities and develop and
• growing diversity of jurisdictions attracting fintech execute their strategic plans.
Both total global investment in fintech and the total number investments, particularly $100 million+ VC rounds.
of fintech deals fell between H2’21 and H1’22. Fintech Anton Ruddenklau
investment dropped in both the Americas and EMEA, while Heading into the second half of 2022, market challenges Global Leader of Fintech,
are expected to continue, with investors increasingly Partner and Head of Financial
the Asia-Pacific region attracted a new record high, Services Advisory,
primarily as a result of several large M&A transactions, focusing on top-line revenue growth, profitability, and cash KPMG in Singapore
including the $27.9 billion acquisition of Australia-based flow. M&A activity is well-positioned to grow as mature
Afterpay by Block. The payments space accounted for the sectors see consolidation and investors look for attractive
largest share of fintech investment during H1’22 deals amidst the downward pressure on valuations and as
($43.6 billion), followed by crypto ($14.2 billion). some startups contemplate alternatives to downrounds.
Looking back, H1’22 can be defined by one word: Whether you’re the CEO of a large financial institution or
unexpected. Consider some of the key trends we’ve seen the founder of an emerging fintech, understanding how
across the fintech sector over the past 6 months: market dynamics have shifted could be critical to your
competitiveness and sustainability — while finding ways to All currency amounts are in US$ unless otherwise
• declining investment across most jurisdictions, specified. Data provided by PitchBook unless
become more efficient could help minimize cash burn. As otherwise specified.
particularly between Q1’22 and Q2’22
you read this edition of Pulse of Fintech, ask yourself:
• shuttering of IPO window in wake of turmoil in public What can we do now to make sure we’re positioned to
markets and rapid decline in valuations face whatever challenges the future might hold?
#fintechpulse
© 2022 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
2
Contents
Global Fintech
insights segments
• Global fintech • Payments
investment analysis • Insurtech
(VC, PE, M&A) • Regtech
04 13
• Top fintech trends
• Blockchain/cryptocurrency
for H2 2022
• Cybersecurity
• Wealthtech
Featured
interview Regional
• Rob Schemik
insights
26 29 33
CEO, boltech
• Americas
• EMEA
• ASPAC
Spotlight article
• Embedded finance fueled by cloud-
based core banking technologies
©2022 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
Global insights Fintech segments | Featured interview | Spotlight article | Regional insights
Global fintech
investments in H1 2022
recorded $107.8B with
2,980 deals
#fintechpulse
4
Global insights
“
Global investment in fintech falls to $107.8 billion despite robust VC funding The fintech market
Fintech deals volume and total global fintech investment Downward pressure on valuations brings IPO activity experienced a massive year
drops in H1’22 almost to a halt, could spark downrounds globally in 2021, which makes
it look like investment has
Global investment in fintech fell from $111.2 billion across 3,372 The turbulence in the public markets globally had a major impact somewhat fallen off a cliff so
deals in H2’22 to $107.8 billion across 2,980 deals in H1’21, on the valuations of many public tech companies in H1’22, far in 2022. That really isn’t
mirroring the decline in investment experienced in the broader including fintechs. This, combined with other challenging market the case. We’ve simply
technology sector. Total fintech investment and deals volume factors, brought IPO activity almost to a halt — a trend expected to shifted back to levels seen in
declined in both the Americas and EMEA regions, while the Asia- continue through H2’22. With the IPO door closed, H2’22 could 2019 and 2020. Taking out
Pacific region attracted a new annual high of fintech investment see downrounds as companies that had planned to exit in 2022 2021’s outlier results, global
amidst a decline in the number of deals. The new Asia-Pacific look to raise capital under less than optimal circumstances. fintech investment and
record was driven almost entirely by three large M&A transactions: interest was quite positive in
Investors looking for the next big fintech opportunity
the $27.9 billion acquisition of Australia-based Afterpay by Block, H1’22. While the uncertainty
the $2.1 billion buyout of Japan-based Yayoi by KKR, and the In 2021, investment in fintech was quite extraordinary as investors permeating the market is
$1 billion merger of Australia-based fintechs Superhero and Swiftx. flocked to make investments in the sector. While investment has expected to continue into
dropped back to levels seen in previous years, the space is H2’22, the diversity of fintech
VC investment in fintech remains robust as Europe sets
expected to remain a strong focus for investors in H2’22 and into subsectors, combined with
new record
2023. Fintech investors, however, are expected to become more the diversity of jurisdictions
While VC investment globally declined from $66.5 billion in H2’21 discerning with their investments — focusing more on profitability attracting fintech investments,
to $52.6 billion in H1’22, compared to all periods outside of 2021, and cash flow when evaluating opportunities. Investors are also could help keep investment in
the amount was incredibly robust. While the Americas attracted the expected to pay more attention to areas adjacent to traditional the space relatively solid over
”
largest amount of VC funding ($27.2 billion), EMEA saw a new financial services offerings, such as open data and decentralized the near-term.
record high level of funding for a 6-month period ($16.6 billion), led finance. The B2B space is also expected to be a high priority for
by the world’s two largest fintech rounds in H1’22: a $1.1billion investors. Anton Ruddenklau
Global Fintech Leader,
raise by Germany-based Trade Republic and a $1 billion raise by Partner and Head of Financial Services
UK-based Checkout.com. Fintech-focused VC investment in the Advisory, KPMG in Singapore
Asia-Pacific region remained quite soft at $8.7 billion.
#fintechpulse
5
Global insights
“
Payments space stays hot in eyes of investors in H1’22, Trends to watch for in H2’22
Fintech investors still have a
but could taper off
• Market corrections — including declining valuations, increasing significant amount of dry
Investors in all key jurisdictions continued to flock to the payments M&A and a growing number of distressed businesses — in light powder available to them in
space in H1’22, investing $43.6 billion in payments-focused of the predicted recession and the over-enthusiasm and over- many parts of the world. But
companies. Given the increasing macroeconomic challenges, investment in key areas over the last 18 months. given the current market
investment in the payments space could taper off a bit heading into climate, they are becoming
• Continued focus on embedded solutions, including payments,
H2’22, particularly with respect to early-stage deals. M&A activity is more discerning with their
finance, and insurance.
expected to remain strong as a result of increasing consolidation investments, focusing more
among payments firms and as the number and size of add-in • Big tech companies and other corporates prioritizing on profitability and on the
transactions rises. partnerships, while also looking for opportunities for add-ins at sectors expected to do well
bargain prices compared to recent years. in a new challenging market.
Blockchain and crypto space takes hit, still sees big The B2B space is expected
• Growing focus on B2B solutions aimed at improvement of
deals to remain quite attractive to
infrastructure or on the optimization of operational activities like
While the crypto space experienced significant challenges during AR/AP. fintech investors heading
into H2’22, in addition to
”
the first half of 2022, crypto-focused companies attracted
• Slowdown in crypto interest and investment, particularly retail areas like open data.
$14.2 billion during H1’22, including a $1.1 billion raise by
firms offering coins, tokens and NFTs.
Germany-based Trade Republic in June.
• Increasing focus on underdeveloped fintech markets, including Judd Caplain
Global Head of Financial Services
jurisdictions in Africa.
KPMG International
#fintechpulse
6
Global insights
Top Fintech trends for H2’22
During the first half of 2022, numerous factors combined to affect the upward trajectory of fintech investment globally, including geopolitical uncertainty,
turbulent public markets, ongoing supply chain disruptions and challenges, high levels of inflation, and increasing interest rates. With no end in sight to the
levels of uncertainty, fintech investment in H2’22 could be quite subdued, particularly compared to the significant record highs experienced in 2021. Here are
our top predictions for fintech in H2’22:
1. 4.
Valuations continuing to adjust as cost of capital increases: As interest B2B solutions will become more attractive to investors: As the world
rates continue to rise, capital will become more expensive. This will have teeters on the edge of a recession, fintech investors will likely enhance
an impact on valuations and will drive investors to enhance their focus on their focus on B2B companies working to help companies become more
cash flow, top line revenue growth and profitability. efficient or enable them to expand their value propositions.
2. 5.
M&A will increase as corporates and PE firms look for bargains: Given the Fintechs will continue to focus on data-driven solutions: Fintech
downward pressure on valuations, M&A activity will likely increase as companies will continue to focus on finding unique ways to collect, assess,
investors see the opportunity to make acquisitions at better prices than and utilize data in order to differentiate their offerings — in the eyes of both
have been seen in recent years. Startups could also look to sell as an corporates and consumers.
alternative to holding a down round.
3. 6.
Interest in cybersecurity automation will keep growing: With cybersecurity Crypto and blockchain investments will increasingly focus on infrastructure:
concerns only growing on the radar of most companies, there will likely be While investment in cryptocurrencies is expected to slowdown further, there
an increasing focus on cybersecurity automation as a means to improve will likely be a continued focus on the use of blockchain in financial market
cybersecurity management while also managing talent shortages and modernization.
improving operating efficiencies.
#fintechpulse
7
Global insights
Even amid volatility, deal flow continues

Total global investment activity (VC, PE and M&A) in fintech Global venture activity in fintech
2019–2022* 2019–2022*
$250 8,000 $140 5,554 6,000
$120 5,000
$200
6,673 6,000 $100
3,384 3,399 4,000
$150 4,102 4,077
$80
2,980 4,000 2,548 3,000
$100 $60
2,000
2,000 $40
$50
$20 1,000
$215.1 $127.7 $226.5 $107.8 $45.6 $46.5 $121.5 $52.6
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
Deal value ($B) Deal count Deal value ($B) Deal count
Global M&A activity in fintech Global PE growth activity in fintech

2019–2022* 2019–2022*
$200 1,200 $14 200
964 155
1,000 $12
$150 $10 123 150
800 106
595 572 $8
$100 600 83 100
349 $6
400 $4
$50 50
200 $2
$166.2 $77.6 $93.1 $49.1 $3.4 $3.6 $12.0 $6.1
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
Source: Pulse of Fintech H1'22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2022.
#fintechpulse
8
Global insights
Venture valuations remain elevated

Global median pre-money valuations ($M) by stage in fintech Global cross-border M&A activity in fintech
2019–2022* 2019–2022*
$70 322 350
$152.0 $150.0
$60 300
$50 202 250
190
$40 200
$70.1
$60.6 $30 126 150
$51.0
$35.0 $20 100
$15.1 $20.4
$5.9 $8.1 $10.5 $10 50
$5.3 $65.8size ($M) in fintech
Global median M&A $11.2 $42.0 $31.8
2019 2020 2021 2022* $0
2019—2022*
0
2019 2020 2021 2022*
Angel & seed Early-stage VC Late-stage VC Deal value ($B) Deal count
Global VC activity in fintech with corporate participation Global median M&A size ($M) in fintech
2019–2022* 2019–2022*
$70 2,000 $70
1,625 $60.2
$60 $60 $55.0
$50 1,500
$50 $41.4
$38.8
$40 867 $40
820 775 1,000
$30 $30
$20 500 $20
$10
$24.4 $25.9 $57.3 $25.9 $10
$0 0
2019 2020 2021 2022* $0
Deal value ($B) Deal count 2019 2020 2021 2022*
#fintechpulse
9
Global insights
As of yet, it remains to be seen if the dip in Q2 2022 is a portent of trends to come

Total global investment activity (VC, PE and M&A) in fintech Global M&A activity in fintech
2019–2022* 2019–2022*
$160 1,800 $140 300
$140 1,600
$120
250
1,400
$120
$100
1,200 200
$100
1,000 $80
$80 150
800
$60
$60
600 100
$40
$40
400
$15.1
$14.3
50
$10.2
$20 $20
$8.0
$144.9
$8.0
$7.5
200
$130.5
$26.2
$25.6
$21.7
$27.6
$64.1
$62.0
$53.3
$60.9
$50.3
$73.8
$34.0
$18.4
$51.2
$34.2
$19.7
$23.2
$41.1
$17.4
$3.8
$16.0
$0 0 $0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019 2020 2021 2022 2019 2020 2021 2022
#fintechpulse
10
Global insights
Quarterly deal value tallies remain robust, especially relative to historical averages
Global venture activity in fintech Global VC activity in fintech with corporate participation
2019–2022* 2019–2022*
$40 1,600 $25 500
450
$35 1,400
$20 400
$30 1,200
350
$25 1,000
$15 300
$20 800 250
$15 600 $10 200
150
$10 400
$5 100
$5 200
$13.0
$14.7
$13.3
$12.0
$12.2
$26.3
$28.7
$35.1
$31.4
$23.7
$28.8
50
$12.9
$19.6
$15.5
$15.4
$10.5
$8.1
$9.9
$9.1
$4.1
$4.5
$6.1
$9.8
$8.0
$5.0
$6.7
$6.2
$9.3
$0 0 $0 0
2019 2020 2021 2022 2019 2020 2021 2022
Deal value ($B) Deal count Angel & seed Early-stage VC Late-stage VC Deal value ($B) Deal count
#fintechpulse
11
Global insights
Top 10Topglobal fintech deals in 2020

10 global fintech deals in H1 2022
3 1. Afterpay — $27.9B, Melbourne, Australia — Payments — M&A
2. Sia (Milan) — $3.9B, Milan, Italy — Payments — M&A
3. Bottomline Technologies — $2.6B, Portsmouth, US — Institutional/B2B —

Public-to-private buyout
7 4. Yayoi — $2.1B, Tokyo, Japan — Institutional/B2B — Corporate divestiture
6 5
2 5. Interactive Investor — $1.8B, Leeds, UK — Wealth/investment management —
4
9 8 M&A
6. FNZ — $1.4B, London, UK — Wealth/investment management — PE growth
7. SimpleNexus — $1.2B, Lehi, US — Lending — M&A

10
1
8. Trade Republic — $1.15B, Berlin, Germany — Capital markets — Series C
9. Technisys — $1.1B, Miami, US — Institutional/B2B — M&A
10. Superhero — $1.06B, Sydney, Australia — Wealth/investment management —

M&A
#fintechpulse
12
Global insights Fintech segments Featured interview | Spotlight article | Regional insights
Fintech segments
• Payments
• Insurtech
• Regtech
• Cybersecurity
• Wealthtech
• Blockchain/cryptocurrency
#fintechpulse
13
Fintech Payments
Payments space continues to attract big investment in H1’22

Total global investment activity (VC, PE and M&A) in payments Investment in the payments space remained very strong in H1’22, accounting for
2019–2022* $43.6 billion in investment compared to the $60.3 billion seen during all of 2021. The
$120 1,000 acquisition of Australia-based Afterpay by Block (formerly Square) for $27.9 billion
895 accounted for the largest payments deal of the quarter — and the largest fintech deal
900
globally during H1’22 — followed by the $2.6 billion buyout of Bottomline
$100 Technologies by PE firm Thomas Bravo, and a $1 billion VC raise by UK-based
800
Checkout.com. Key H1’22 highlights from the payments sector include:
700
$80 605 US continues to drive payments-focused investment
542 600
The US accounted for a strong portion of payments-focused fintech activity in H1’22,
$60 500 both internally and in terms of driving cross-border investments in the sector. The
ASPAC region continued to be a major target for investment and deal making, with
369
400 Singapore-based Coda Payments attracting $690 million in PE funding during in
$40 H1’22, Indonesia-based Xendit raising $300 million in VC investment, and India-
300
based Slice raising a $220 million Series B round.
200
$20 No end in sight for payments-focused M&A activity
100 The payments space continued to account for high value M&A transactions in H1’22,
$107.8 $29.2 $60.3 $43.6 led by Block’s acquisition of Afterpay. The volume of payments-focused M&A is
$0 0
2019 2020 2021 2022* expected to remain high as companies look to gain market share, grow globally and
limit competition — although deal value could decline given the deflation in valuations
Deal value ($B) Deal count
experienced by many fintechs, and by tech companies in general, given the current
market environment.
#fintechpulse
14
Fintech Payments
“
B2B payments solutions still very attractive for Challenger banks continue to evolve — but also facing
Most challenger banks will
investors challenges
continue to expand into
The B2B payments space attracted significant attention in H1’22, Challenger banks continued to attract a significant amount of new markets and roll out
a trend expected to continue into H2’22 as businesses look for attention during H1’22 in many regions of the world as many new products and services
fintechs with technology solutions able to help them digitize and continued to evolve and grow their value propositions to include in 2022, despite increased
improve the efficiency of their AP/AR activities. stronger hyper-personalization, data driven predictive analytics funding difficulties and
and predictive banking services, and adaptive customer banking some regulatory
Caution growing around buy-now-pay-later (BNPL) challenges in different
experiences. Under pressure to grow, however, some challenger
companies
banks have come under regulatory scrutiny as a result of jurisdictions. If they want
BNPL companies are coming under more scrutiny from regulators compliance issues. In March, the Bank of Italy banned N26 from to be successful, however,
as consumers struggle with rising inflation and rising costs. With onboarding new customers due to AML issues.1 challenger banks should
interest rates also rising, BNPL companies will likely feel focus on ensuring they’ve
What to watch for in H2’22 considered their
significant pressure on their margins due to the increasing cost of
borrowing. With the world on the cusp of a recession and an • potential down rounds as some payments companies seek to compliance requirements
economic slowdown predicted, fintech investors are starting to raise capital at lower valuations fully even amidst the rush
take a very cautious approach to making investments in the BNPL to be relevant in the
”
• further consolidation as payments companies look to survive market and the industry.
space as it is becoming a higher risk value proposition.
and better distinguish themselves from the competition, and
• continued focus on open banking and embedded finance and Courtney Trimble
Global Leader of Payments,
on fintechs able to enable a more integrated and frictionless Principal, Financial Services,
customer experience. KPMG in the US
1 https://www.finextra.com/newsarticle/39969/bank-of-italy-bans-n26-from-onboarding-new-customers-over-aml-failings
#fintechpulse
15
Fintech Insurtech
Slowdown in investment in insurtech sector amid global uncertainty

Total global investment activity (VC, PE and M&A) in insurtech Investment in the insurtech sector dropped considerably, with $3.8 billion of investment globally
2019–2022* during H1’22 — well off pace to match the $14.8 billion in investment seen during 2021. The largest
$18
470
500 insurtech deal of H1’22 was the acquisition of US-based Zenefits by TriNet for $220 million. This
was followed by several $100 million+ VC deals, including $211 million and $200 million raises by
$16 416
450 Healthcare.com and Newfront insurance — both in the US, and a $196 million raise by France-based
Alan. The Americas and Europe accounted for the vast majority of insurtech investment, with India-
400 based Turtlemint’s $121 million raise the largest in the Asia-Pacific region. Key H1’22 highlights from
$14
343 the insurtech space include:
350
$12
Elevated risk causing investors in insurtech to pause
300
$10 Increasing market risk — including global geopolitical uncertainty, rising inflation and interest rates,
250 and uncertainty around valuations with concerns about a potential global recession — caused
$8 investment in insurtech to decline in H1’22 as investors took a pause. Heading into H2’22, investors
187 200 in insurtech will likely become more strategic about where they are placing their capital, conducting
$6 more due diligence and focusing more on the insurtech’s ‘path to profitability’.
150
Investor appetite for new business models remains, but experience matters
$4
100
During H1’22, fewer insurtechs started by founders coming from other sectors raised significant
$2 50 funding. While there continues to be an appetite from investors and corporates to back innovative
insurance business models, both interest and funding is expected to focus primarily on startups run
$13.1 $16.6 $14.8 $3.8
$0 0 by highly experienced entrepreneurs with legitimate insurance industry experience.
2019 2020 2021 2022*
#fintechpulse
16
Fintech Insurtech
“
Depressed valuations could spark M&A activity Embedded insurance still attracting attention
I do see more appetite for
In H1’22, public insurtechs saw significant downward pressure on Embedded insurance saw significant hype in 2021; while interest early-stage businesses being
their valuations, similar to many other publicly traded tech fell back down to earth in H1’22, it has continued to attract founded because they are a
companies. Given the decline in valuations, there could potentially attention — particularly from newer carriers looking for growth smaller dollar opportunity
be an uptick in strategic acquisitions as insurtechs struggle and opportunities. Once concern related to embedded insurance is and there’s more upside for a
corporates — particularly carriers — look to acquire insurtech that offerings require startups be very closely integrated with their lot of those investors.
capabilities at better prices. distribution partners to ensure underwriting risks are well Historically, we’ve seen some
understood. incredible businesses being
Infrastructure and data solutions gaining traction
built during economic
What to watch for in H2’22
Insurtech investors are showing significantly less interest in value downturns, funded by early
• ongoing evolution and growth of MGAs focused on underwriting
chain specific point solutions, focusing their attention more on stage seed and Series A
specific risks for specific types of customers that large and
data-driven companies focused on enabling activities and on investors. The current market
traditional carriers find difficult to address
infrastructure companies working to help sector participants environment may make it a
improve efficiencies or extend their value across the value chain. • increasing focus on customization of insurance products bit more difficult to get later
stage funding and relatively
• growing focus on insurtechs looking to help companies rethink
easier to get early stage
the protection of their assets and access to those assets.
funding — but probably not
at the founder-friendly
economic terms we’ve seen
”
over the past few years.
Ram Menon
Global Head, Insurance Deal Advisory
KPMG International
#fintechpulse
17
Fintech Regtech
With $5.6 billion of investment, global investment in regtech holds strong in H1’22
Total global investment activity (VC, PE and M&A) in regtech Compared to a number of other areas of fintech, global investment in regtech showed
2019–2022* strong resilience in H1’22. Globally, regtech companies attracted $5.6 billion in
$14 400 investment across 157 deals — following a similar trajectory to the level of investment
357 seen in 2021. The US accounted for the largest share of regtech investment during
350 H1’22, including the $2.6 billion buyout of Bottomline Technologies by Thomas Bravo,
$12
the $450 million Series D raise by ConsenSys, and the $240 million acquisition of
FourQ by cloud-based financial operations company Blackline. Key H1’22 highlights
300
$10 from the regtech sector include:
256
250 Americas accounts for lion’s share of H1’22 regtech investment
221
$8
During H1’22, the Americas accounted for the largest percentage of regtech
200
investment, with the US responsible for most of the region’s regtech activity. While
157
$6 regtech investment declined across the Asia-Pacific region during H1’22, very active
150 regulatory regimes in jurisdictions like China, Hong Kong (SAR), China and Singapore
$4 are expected to keep regtech on the radar of investors over the longer-term. The
100 EMEA region saw a decrease in the speed of maturation of the market during H1’22,
although this could be attributed to the turbulence in Easter Europe.
$2
50
Rapidly evolving regulatory regimes driving interest in regtech
$3.7 $10.7 $12.0 $5.6
$0 0 Regulations related to areas like financial services, cryptocurrencies, data and
2019 2020 2021 2022* privacy, risk and compliance, and ESG continued to evolve in H1’22, with more
Deal value ($B) Deal count changes forecast over the next 12-24 months. The immense complexity and level of
work required by domestic and global companies to be in compliance with constantly
Source: Pulse of Fintech H1'22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2022. changing regulatory requirements both within and across jurisdictions has continued
to be a key driver of interest in regtech solutions.
#fintechpulse
18
Fintech Regtech
“
Changing nature of work fostering resilience in regtech What to watch for in H2'22
As can be seen from the top
investment
• Continued development, evolution, and implementation of deals of 2022 so far, anti-
COVID-19 significantly changed the way people live and work regulatory regimes and guidelines, such as MiCA, Basel IV, and money laundering, fraud
around the world. Many companies are still grappling with the ESG standards. prevention, and KYC
impact of innovative technologies and models of work on their • Financial system regulators widening their expectations beyond continue to drive a lot of the
HR management and risk and compliance processes. This, traditional banks and financial institutions to include other investment in the regtech
combined with growing cost pressures and the desire to quickly contributors to the capital markets — such as asset managers space. The geopolitical
and challenger banks. situation is only helping the
rein in spend, has likely contributed to the resilience of regtech
investment. • Increasing focus on AI-powered identity verification, KYC & growth of these companies,
AML compliance and identity proofing on order to increasingly which will likely keep regtech
Payments system compliance attracts big deals automate the prevention and combat of fraud. investment strong heading
During H1’22, some of the largest regtech deals centered into H2’22. While we’re not
around payments system processes and compliance, such as seeing it in the market yet,
the $2.6 billion buyout of Bottomline Technologies — a we also expect a new wave
company looking to streamline payments processes across of regtech companies
global businesses with monitoring and behavioural analysis to focused on supporting ESG
detect fraud and reduce risk. reporting and compliance to
”
emerge in the near future.
Fabiano Gobbo
Global Head of Regtech,
KPMG International
#fintechpulse
19
Fintech Cybersecurity
Investor interest in cybersecurity remains hot in H1’22

Total global investment activity (VC, PE and M&A) in fintech: cybersecurity At the end of H1’22, global investment in cybersecurity was running well short of
2019–2022* 2021’s record, primarily due to the lack of a completed blockbuster M&A deal similar
$6 70 to the $2.7 billion acquisition of Verafin in H1’21. Despite the lack of completed M&A
61 deals, VC investor interest and investment in the cybersecurity space remained
58
$5
60 strong — led by four big raises in the US, including a $550 million raise by
54
Fireblocks, a $170 million raise by Chainalysis, and $100 million raises by TokenEx
50 and Cowbell Cyber. Estonia-based Veriff also raised $100 million during H1’22. The
$4 volume of cybersecurity deals globally was also very robust at mid-year, if just shy of
40 record pace. Key H1’22 highlights from the cybersecurity sector include:
$3
29 Big platform providers focusing on cybersecurity automation
30
In March, Google announced plans to acquire incidence response company
$2
20 Mandiant for $5.2 billion, highlighting the immense focus that hyper-scale providers
are placing on cybersecurity automation and platform solutions. If completed, the
$1
10 deal would singlehandedly break 2021’s record $5.1 billion in global cybersecurity
investment. Google’s counterparts have also shown interest in integrating
$1.0 $2.2 $5.2 $1.2 cybersecurity automation into their own cloud platforms. This focus on automation
$0 0
2019 2020 2021 2022* and integration by big providers will likely drive a similar focus among smaller niche
Deal value ($B) Deal count and boutique vendor platforms.
#fintechpulse
20
Fintech Cybersecurity
“
Cybersecurity firms buck downward valuation trend What to watch for in H2'22
There’s a lot of concern out
While valuations of companies in many other fintech subsectors • Increasing consolidation as companies that traditionally there regarding the sheer
have fallen, following the trend seen more broadly among tech focused on one segment of cybersecurity (e.g., endpoint number of cybersecurity
companies, valuations of some cybersecurity firms showed strong alerting) look to build out their cybersecurity offerings. incidents — the massive
resilience in H1’22. In particular, companies focused on extreme amount of data coming into
• Shift in focus from MDR as a means for conducting level one
automation continued to see very high valuations; during H1’22, security operations centers
ticket triage to MDR providing full stack response.
cyber asset attack surface management platform JupiterOne through alerts if you will.
• Continued focus on startups focused on extreme automation.
earned a $1 billion unicorn valuation following the announcement of There’s just so much coming
a $70 million Series C raise.2 in and not enough security
workers out there to simply
Rapidly increasing focus on data analytics
throw more bodies at the
Companies today have access to massive amounts of data, problem. This is why we’re
including data essential for preventing, managing and responding starting to see a lot more
to cybersecurity issues. During H1’22, investors focused focus on automation and
significantly more attention on the integration of data analytics and machine learning. In 2021,
AI within cybersecurity platforms and solutions, including XDR/EDR we started to see a lot of
focused solutions and security orchestration tools (SOAR machine-learning type
platforms). algorithms make their way
into cybersecurity, but now its
”
really taking off.
Charles Jacco
Americas Cyber Security Services,
Financial services Leader,
Principal,
2 https://www.prnewswire.com/news-releases/jupiterone-achieves-valuation-of-over-1b-with-70m-series-c-funding-to-fuel- KPMG in the US
innovation-in-cybersecurity-and-democratize-access-for-all-301559956.html
#fintechpulse
21
Fintech Wealthtech
Global investment in wealthtech soft in H1’22

Total global investment activity (VC, PE and M&A) in wealthtech After a very strong 2021, wealthtech investment softened considerably in H1’22,
2019–2022* mirroring the decline in investment more broadly around the world. Globally,
$1.6 40 wealthtech attracted $443 million during H1’22, led by US-based Titan’s $100 million
37
VC funding round, and UK-based MoneyFarm’s $59.8 million PE deal. Key H1’22
$1.4 35 highlights from the wealthtech space include:
29 Fragmented market driving corporate investment opportunities

$1.2 30
Globally, the wealthtech sector continued to be quite fragmented in H1’22, with a
24 significant number of small players providing very specialist technology in pockets.
$1.0 25
This is driving activity among corporates looking to buy access to wealthtech
technologies, whether through direct investments or by acquiring full organizations —
$0.8 20
such as the H1’22 acquisition of B2B advisor platform Hubwise by SS&C
17
Technologies. 3
$0.6 15
Investors predominantly focusing on established players
$0.4 10
While there continued to be dry powder in the VC and PE market in many regions of
the world during H1’22, the growing maturity of the wealthtech sector has led to
$0.2 5 investors taking a more critical view of opportunities. They are now focusing less on
$0.3 $0.2 $1.4 $0.4 making broad investments across the space, concentrating their capital on
$0.0 0 wealthtechs with truly unique business models and those seen to be more valuable,
2019 2020 2021 2022*
robust, and financially sustainable compared to their counterparts.
3 https://www.prnewswire.com/news-releases/ssc-completes-acquisition-of-hubwise-securities-limited-301510502.html
#fintechpulse
22
Fintech Wealthtech
“
Increasing rationalization of wealthtechs What to watch for in H2'22
Given the range of well-
A significant amount of VC and PE money flowed to early-stage • Increasing focus on solutions aimed at the B2B2C market. established, robust, and
wealthtech companies 3 to 5 years ago. Over the last 12 months, globally recognized
• Consolidation across the wealth management and wealthtech
it was predicted that there would be a shakeout among platforms like Avaloq,
ecosystem, including among advisors.
wealthtechs, in part because of industry maturation and also InvestCloud, SS&C, and
because there’s only so much time PE firms will follow their • The large transfer of wealth across generations beginning to FNZ, investors are not as
money for before pressing for an exit. The predicted shakeout drive innovation and the development of unique wealth interested in small scale
among wealthtechs is now starting to occur; during H1’22, for management solutions. middle or back office
example, Blockchain.com announced its acquisition of Singapore- • Increasing focus on companies focused on helping traditional systems at the moment —
based trading-focused Altonomy, while digital asset platform wealth management firms understand and use their data more but the front office still offers
Amber Group announced its acquisition of Hong Kong (SAR), effectively. plenty of opportunities for
China based asset management firm Celera Markets. new wave wealthtech
• Growing focus on ESG, from an investment decision making
providers to gain traction.
Continued emergence of hybrid wealth advisory model perspective.
Looking ahead to H2’22 and
During H1’22, hybrid models of wealth advisory continued to • Burgeoning focus on leveraging open finance and embedded beyond, investments in
emerge, focused on providing technology platforms that enable finance to expand wealth management opportunities. innovative front office
industry participants — particularly in areas like financial wealthtech solutions will be
”
enablement, financial wellbeing, and financial education. This a key area to watch.
includes the emergence of hybrid solutions focused on helping
wealthy individuals make more informed investment decisions. Shelley Doorey-Williams,
Partner, Wealth and Asset
Management Consulting
KPMG in the UK
#fintechpulse
23
Fintech Blockchain/cryptocurrency
Investment in crypto and blockchain falls from 2021 high, remains ahead of all other years
Total global investment activity (VC, PE and M&A) in blockchain & cryptocurrency After a record-shattering 2021, global investment in crypto and blockchain fell to $14.2
2019–2022* billion during H1’22. Despite the crypto space collapsing significantly since mid-way
$35 1,800 through Q1’22 due to the unexpected Russia-Ukraine conflict, rising inflation, and the
1,583 challenges experienced by the Terra crypto ecosystem, investment at mid-year remained
1,600 well above all years prior to 2021. This highlights the growing maturity of the space and
$30
the breadth of technologies and solutions attracting investment. During H1’22, the largest
1,400 deals in the space came from VC raises, including a $1.1 billion raise by Germany-based
$25 Trade Republic, a $550 million raise by US-based Fireblocks, a $500 million raise by
1,200 Bahamas-based FTX, and a $450 million raise by ConsenSys. Key H1’22 highlights from
$20
the crypto and blockchain space include:
1,000
Changing nature of investors shifting crypto investment risk profile
$15 725 800
663 660 Prior to 2018, most crypto investment came from retail consumers. Since then, the
600 investor profile has changed, with institutional and corporate investors now accounting for
$10 a much larger share of investment. This has driven significant changes to the perception of
400 risk related to crypto assets. While crypto assets historically were considered quite
uncorrelated to traditional assets from an investment risk perspective, they are now acting
$5
200 very similarly. The current macro-economic trend will likely be an important test for
cryptos, and especially Bitcoin, in terms of correlation with other assets.
$5.3 $5.7 $32.1 $14.2
$0 0
2019 2020 2021 2022* Growing focus on currency sovereignty
Deal value ($B) Deal count In the wake of El Salvador adopting Bitcoin as legal tender in 2021, there has been
increasing interest in the use of cryptocurrencies in order to support crypto sovereignty
Source: Pulse of Fintech H1'22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2022. and move away from the use of existing currencies like the US Dollar. During H1’22, the
Central African Republic became the second country to make Bitcoin legal tender. Other
developing nations could follow their lead in H2’22 and beyond.
#fintechpulse
24
Fintech Blockchain/cryptocurrency
“
Regulators continuing to focus on crypto regulation What to watch for in H2'22
Looking ahead, we are
While China has banned crypto trading outright, and India is • Resilience of crypto-focused companies being tested very hard going to see some cryptos
considering following suit, the regulators in a number of other as some look to recapitalize at lower valuations. cutting their valuations and
jurisdictions have continued to focus on finding ways to protect working to raise money
• Well-managed crypto companies with healthy risk
consumers while also fostering the evolution and growth of because it’s their only
management policies, long-term vision, and strong cost and
competitive and attractive crypto markets. At the end of H1’22, the option. They’d rather raise
risk management approaches surviving, while others bust.
European Union agreed to new regulations for the cryptocurrency money and be capitalized at
industry — Markets in Crypto-Assets (MiCA).4 • Growing focus on solutions related to compliance and crypto a lower valuation rather than
transaction traceability. not doing so and taking the
• Increasing interest in stablecoins, particularly from corporates risk of dying out. Of course,
looking to gain the operational advantages of crypto, including some cryptos will die out —
costs, delays, visibility, liquidity, and ease-of-use. particularly those that don’t
have clear and strong value
• Innovative partnerships between crypto firms and companies in propositions. That could
other industries in order to address ESG concerns. actually be quite healthy
from an ecosystem point of
view because it’ll clear away
some of the mess that was
created in the euphoria of a
bull market. The best
companies will be the ones
”
that survive.
Alexandre Stachtchenko
Director blockchain & crypto assets
4 https://www.cnbc.com/2022/06/30/eu-agrees-to-deal-on-landmark-mica-cryptocurrency-regulation.html KPMG France
#fintechpulse
25
Global insights | Fintech segments Featured interview Spotlight article | Regional insights
Featured interview
with Rob Schimek, CEO bolttech
Enabling the future: How fast-growing

unicorn bolttech is forging a global tech-
enabled insurance ecosystem
#fintechpulse
26
Featured interview: bolttech
Enabling the future: How fast-growing unicorn bolttech is forging a global tech-enabled insurance ecosystem
Among the industries that make up global financial services, insurance is still considered ripe for disruption in many jurisdictions around the world. Over the last 2 to 3 years, VC
investors in the Americas, the Asia-Pacific region, and Europe have shown keen interest in the space, investing in a broad range of startups looking to disrupt or improve various
aspects of the insurance value chain. Standing out from the crowd of insurtechs working to redefine the future of insurance is Singapore-based bolttech — a fast-growing unicorn
company that has developed a highly successful tech-enabled insurance exchange offering focused primarily on the B2B2C market. “The mission of bolttech is to become the
world's leading technology-enabled insurance ecosystem,” says Group CEO Rob Schimek. “We connect insurers, distribution partners, and customers — making it easier and
more efficient to buy and sell insurance.”
Leveraging partner ecosystems to drive growth Bolttech currently holds 35 insurance licenses globally, in addition to licenses in all 50
U.S. states. “[These licenses] are part of the moat that makes it very difficult for others
Bolttech officially launched in 2020. The company was initially conceived within an
to come in and compete so easily,” Schimek notes. “They’re a critical linchpin to our
existing insurance ecosystem and scaled very quickly, the company’s rapid global
ability to offer partners expertise and access to multiple markets with ease because
expansion since its inception is a testament to its broader partnership approach.
insurance is, in fact, a very highly regulated business.”
“Many of our partners have ecosystems, and we continue to tap into those to make a
confluence…a mega ecosystem [for insurance].” Schimek says. Bolttech’s insurance licenses make it easy for its partners to integrate insurance
offerings into their own products and services at speed, and then scale them as
Bolttech’s approach has been incredibly effective. In less than 2 years, the company
needed across different geographies. Bolttech’s partners also benefit from the
has grown into the most international insurtech in the world, with a presence in over
company’s ongoing innovation focus. “We have three tech hubs located across
30 countries spread across the Asia-Pacific region, Europe, and the Americas. In
Europe and Asia,” Schimek says. “Our partners are able to leverage this global
2021, it raised the largest Series A round ever ($247 million) by an insurtech
network and tap into our industry-leading new and emerging technologies — which
company, earning coveted unicorn status with a $1 billion+ valuation. In 2021, bolttech
include, among other things, blockchain biometrics and edge computing.”
quoted approximately $44 billion in premiums through its platform.
While forging a robust end-to-end digital process is a dream goal for many companies
Combining technology, access, and bespoke solutions
today, bolttech recognizes that many companies are simply not ready to go
Bolttech’s value proposition goes beyond providing the innovative technical completely digital. That’s why the insurtech is also valued for its ability to provide
infrastructure that enables any business to sell insurance. The company also makes bespoke products that meet unique customer needs, including online and offline sales
the process of providing insurance more accessible and seamless to partners outside support and robust after-sales service that allows partners to increase their customer
of the insurance industry by maintaining insurance licenses in numerous jurisdictions. lifetime value and customer loyalty.
#fintechpulse
27
Featured interview: bolttech
Schimek sees bolttech’s partnership-based approach as a win-win value proposition because by

developing robust relationships with its partners, bolttech often has the opportunity to enter new markets
through them. “In 2021, we entered six countries in Europe with our valued partner Samsung — who we
were already working with in Asia,” he offers as an example.
Looking to the future: Reaching bolttech’s full potential
When asked about bolttech’s future plans given the challenges facing the world today, Schimek stresses
the importance of being resilient. “If the last few years have taught us anything, it's that you have to build
resilience against the uncertainty and disruption that's caused by these impossible to predict external
circumstances,” he explains. “But, these things also present challenges and opportunities for us — and
we have to make sure that we can separate the challenges from the opportunities.”
Listen to the full interview with KPMG’s Global Fintech
One of bolttech’s biggest challenges is that most of its growth has occurred in a time where travel has Leader, Anton Ruddenklau and Rob Schimek CEO of
been severely curtailed. Schimek notes that they’ve launched greenfield businesses in markets he still bolttech. home.kpmg/fintechpulse
hasn’t been able to visit. But bolttech’s success despite travel restrictions and other challenges has him
feeling quite optimistic about the future. “While we've achieved tremendous results and endeavoured to
Launched in 2020, bolttech is a high-growth international
deliver a consistent and unified employee experience, we've done it under really non-ideal insurtech with a mission to build the world’s leading,
circumstances,” he says. “So, I'm really excited about what we can do to reach our full potential as the technology-enabled ecosystem for protection and insurance.
world starts to open up and we can begin to bring our teams together.” Bolttech serves customers in 30 markets across North
America, Asia and Europe. With a full suite of digital and
data-driven capabilities, bolttech powers connections
between insurers, distributors, and customers to make
buying and selling insurance and protection products easier
and more efficient. Bolttech’s leading insurance exchange
quotes more than US$44 billion in premiums annually, and
counts more than 700 distribution partners and 180 insurers
globally. This extensive distribution network is enabled by
pioneering technology, and supported by deep insurance
expertise and licenses across 35 international jurisdictions.
#fintechpulse
28
Global insights | Fintech segments | Featured interview Spotlight article Regional insights
Spotlight
Embedded finance fueled by cloud-based
core banking technologies
#fintechpulse
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29
Spotlight Embedded finance
Embedded finance fueled by cloud-based core banking technologies

Contributors: Scott Huie, Advisory Managing Director, KPMG in the US and Craig Thomason, Contributing Executive, KPMG in the US
Embedded finance is spawning new opportunities for traditional banks and non- • to leverage the elasticity of the cloud to allow banks to meet demand, test new value
financial services organizations alike. As digital technologies advance to meet propositions, and to iterate faster with reduced upfront capital investment to drive
increasingly sophisticated customer expectations, embedded finance makes banking faster speed to market for products and partners by leveraging an API-first core
capabilities from payments to offers for credit available through more access points. • to drive faster speed to market for products and partners by leveraging an API-first
Retailers, platforms and B2B Corporates can embed financial services in a much wider core
range of consumer and commercial settings. • to enable better and faster access to data for insights on customers and other
analytics
Think of this as the digitalization of established models. Just as finance has long been
available during the physical sales experience of buying a car, services such as buy • to improve transaction processing speeds that are required for modern digital
now, pay later are now on offer at the eCommerce point of sale. commerce use cases in e-commerce, platforms and account to account services.
Upgrading the core These market dynamics and realities gave rise to Finxact, an alliance partner for
KPMG in the US, which saw an opportunity to re-shape the future of the core banking
Crucially, however, embedded finance — like so many other digital banking
technology stack. It designed a modern platform built on a microservices-based
innovations — relies ultimately on contemporary core banking technologies. It provides
architecture, real-time, event driven and cloud-native solution — Finxact Core as a
yet another reason for banks to reach their tipping point: the moment when they decide
Service. The Finxact team spent five years re-imagining and delivering a new and
it is no longer possible to rely on legacy systems, and that now is the moment to pivot
innovative platform designed from the ground up without burdens from legacy banking.
to a new core banking platform. This is how banks aim to meet the increased demand
Finxact is now proven in the U.S. market with more than 30 banks and fintechs having
for new and unique digital experiences to retain and attract customers.
adopted the Finxact platform.
Multiple use cases now demand such change: new core technology will sustain
Built leveraging decades of knowledge in this technology area, the Finxact solution is
innovation such as predictive balance recognition, delayed payments authorization,
an approach by a non-traditional FinTech. Rather than focusing on more front-end
contextual behavior modeling used to deliver compelling point of sale offers and real
digital user models, it chose to target the banking core with the aim of enabling the
time banking services that are either event driven or predictive in their nature. And
open accessibility, flexibility, scalability and speed required for banks to help meet
there are also other drivers for a shift to cloud-native, consumption-based platforms:
evolving customer expectations..
#fintechpulse
30
“Finxact is uniquely positioned to lead on the evolving needs of the market, • Is there a long-term path to profit? Profitability matters. Identification of the right
everything from helping banks launch new innovative products to powering segment, solution, entry point and plan for growth is a critical strategic step.
embedded banking to decentralized finance and other Fintech and BaaS offerings”
• What regulatory and compliance requirements need to be met? Are there new
says David Ortiz, Head of Partnerships and Business Development at Finxact.
regulations around the corner? Compliance with regulations and requirements for
Building on stronger foundations customer protection and maintaining safety and soundness is paramount. It will be
important to monitor future regulatory trends and build in flexibility to meet them.
Banks that invest in this way can discover advances in embedded finance, now set to
grow and evolve due to rapidly changing customer needs and expectations. We • Are there new technology capabilities that could render investment obsolete? A
expect additional enhancements that allow banking to be vertically embedded into thorough analysis of the market is critical to understanding and selecting the best
experiences and processes, many of which are hard to predict. They will likely technology strategy.
include ‘mash up’ experiences of banking within non-banking experiences — models
Served by a dynamic ecosystem
to be built upon and improved.
The digital marketplace is fueled by core economic principles of supply and demand
For those with a strong core, the future of innovation and customer benefit is wide-
and this applies to embedded finance.
open for embedded finance.
Demand is driven by better and seamless experiences by customers who have
Nevertheless, companies investing in embedded finance services should manage
amazing technologies at their fingertips and want — and expect — more of the same.
risks carefully. To meet customer needs and demands with the right solutions, they
Typically this is the “customers customer” of a legacy financial services organization.
must address key questions:
• What do customers want and need? It remains as important as ever to “create a Supply is driven by modern technology capabilities and skills to deliver on this
customer” through your product or services. How do you identify new innovations demand; this means both technology and human capital skills are critical to meeting
that customers need but do not know they want yet? This goes beyond just asking customer expectations.
customers via surveys. The supply side ecosystem includes Fintechs, other third-party services companies
(including KPMG), non-financial companies such as retailers, and traditional banks.
• What does the current economic environment allow and/or need? This is a
And more and more banks are investing in new customer-centric technology
particularly relevant question now as spending trends are changing; this could
enablement and talent, whether directly or partnering with third-party providers to help
create opportunities for legacy providers, or for newer companies to step up in the
accelerate embedded banking.
wake of these changing economic patterns.
#fintechpulse
31
Customers can benefit from having more options open to them in a straightforward Well-managed and carefully scoped embedded finance propositions can enhance
and secure experience. Banks can benefit from additional sources of income and by customer experience, drive innovation, and provide value in a safe and sound
staying in front of customer expectations through extension of banking services into manner. Those are big wins for the customers, businesses, and corporate clients
non-banking distribution channels. Fintechs can benefit from delivering their services using them.
directly and/or with banks and non-banking clients to generate fee-based income and
For this reason, we believe embedded finance will continue to grow and that it can be
foster trust with their customers. And non-financial organizations such as retailers can
a positive force for the industry as a whole — and, most importantly, for the customers
benefit from increased sales, lower acquisition costs and improved customer loyalty
that use it.
through new digital access points.
Safety, soundness and customer expectations

Not long ago, shadow banking was on the rise with new money lenders and fast-
finance players emerging to offer finance at often exorbitant rates. One positive aspect
of embedded finance, enabled by a renewed core, is that it brings more finance,
credit, and payments services back into the regulated banking space. That aligns
customer behaviors and experiences to established safety and soundness practices.
Banks must meet high standards, with multiple agencies holding them accountable for
regulation and compliance; this oversight can help ensure consumer trust in
embedded finance capabilities.
#fintechpulse
32
Global insights | Fintech segments | Featured interview | Spotlight article Regional insights
In H1 2022, fintech
investment in the
Americas reached
$39.4B with 1,430 deals
#fintechpulse
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33
Regional insights Americas
Americas attracts $39.4 billion in fintech investment in H1’22, down from $59.7 billion in H2’21
Despite a dip in quarterly investment to $22.7 billion, the Americas saw a record 806 deals in Q1’22, highlighting the strength of the fintech market in the region at the start of 2022.
As geopolitical uncertainty and macroeconomic challenges increased towards the middle to end of the quarter, fintech investors pulled back somewhat. Total investment dropped
to $16.8 billion across 624 deals in Q2’22, bringing the investment total to $39.4 billion across 1,430 deals for the first half of the year.
The US accounted for the largest deals in the Americas during H1’22, including the $2.6 billion buyout of Bottomline Technologies by PE firm Thomas Bravo, the $1.2 billion
buyout of SimpleNexus by nCino, the $1.1 billion acquisition of Technisys by SoFi, and the $748 million VC raise by Ramp. Key H1’22 highlights from the Americas include:
US attracts vast majority of fintech investment in Americas Declining valuations in many fintech subsectors
The US accounted for $34.9 billion of fintech investment in the Americas during Given macroeconomic conditions, many public companies have seen significant
H1’22, a drop from $49.7 billion in H2’22. Fintech investment outside of the US downward pressure on their valuations, including many previously frothy tech
dropped even more prodigiously in the wake of the rapid rise in global geopolitical and companies. While the private markets have not seen adjustments to the same degree
macroeconomic uncertainty — with Brazil and Canada seeing declines in investment as of yet, there could be a number of downrounds heading into H2’22 as fintechs look
greater than 50 percent between H2’21 and H1’22. Brazil saw fintech investment drop to raise capital given the downward pressure on valuations.
from $3.7 billion to $1.4 billion, while Canada saw investment fall from $1.9 billion to
$810 million.
Investors turning focus to profitability and cash flow

Given rising interest rates, increasing levels of inflation, and growing concerns about
an economic recession, fintech investors across the Americas enhanced their focus
on profitability, top-line revenue growth and cash flow when evaluating targets and
companies within their portfolios. Investors have also started to consider the potential
of companies to deliver returns given the changing market conditions.
#fintechpulse
34
“
Interest in challenger bank market remains quite strong Trends to watch for in H2’22
VC and PE firms have
Within the Americas, challenger banks continued to attract • VC firms becoming more aggressive as fintechs look to raise raised a lot of money,
attention — particularly in Latin America, where challenger additional capital. especially in the later half
banks are focusing on middle market consumers and small
• Increasing interest from investors in M&A opportunities in the of 2021, so funds are still
businesses — large populations seen as underserved historically.
Americas as valuations come down. very liquid. As valuations
Interest in challenger banks is also growing in Canada, where the
come down and stabilize
banking market has long been dominated by a small number of • Regulators focusing more heavily on the cryptocurrency space
and investors become
big banks. in order to protect consumers.
more comfortable with
• Continued absence of IPO activity — and the dissolution of what the outlook looks
some SPACs. like, we may see deal
Slowdown in funding, particularly in blockchain and activity pick up, but
crypto • Investment in payments and cybersecurity showing some
resilience. investors are going to
After a record-breaking year of crypto ad blockchain investment in want to provide funding
the Americas during 2021, investment in the space slowed during at much different
H1’22. While investment remained very strong compared to valuations than they did
pre-2021 results, led by January raises by US-based Fireblocks before. Many will also
($550 million) and Bahamas-based FTX, H2’22 could present want to extract more
more challenges for companies in the sector. ownership out of their
investments than maybe
they’ve been able to over
”
the last year or 2.
Robert Ruark
Principal, Financial Services
Strategy and Fintech Leader,
KPMG in the US
#fintechpulse
35
After a record year, dealmaking is still proceeding at a robust, if not accelerated, clip
Total investment activity (VC, PE and M&A) in fintech in the Americas Venture activity in fintech in the Americas
2019–2022* 2019–2022*
$150 4,000 $80 2,537 3,000
3,077 2,500
3,000 $60
$100 2,000
1,772 1,396 1,400
1,726 2,000 $40 1,233 1,500
1,430
$50 1,000
1,000 $20
500
$119.4 $84.4 $112.6 $39.4 $20.4 $24.5 $69.1 $27.3
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
M&A activity in fintech in the Americas PE growth activity in fintech in the Americas
2019–2022* 2019–2022*
$120 469 500 $6 71 80
$100 $5 58
400 60
318
$80 280 $4 46
300 38
$60 $3 40
159 200
$40 $2
100 20
$20 $10.1 $1
$97.5 $58.5 $37.9 $1.5 $1.3 $5.7 $2.1
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
#fintechpulse
36
Financing metrics have yet to slide

VC activity in fintech with corporate participation in the Americas Given all the volatility across financial markets and economies, thanks to a powerful
2019–2022* combination of geopolitical tension, outright conflict, ongoing supply chain issues and
$40 686 800 more, it could be likely that eventually deal flow will subside further. However,
currently, financing metrics remain elevated if not at record levels, with valuations and
$30 600
M&A sizes holding steady. On the venture side, that is partially due to the sheer
327 345 amount of dry powder underpinning investment levels and the number of fund
$20 297 400
managers still looking to follow their mandates even in a challenging environment.
$10 200 On the M&A side, it is likely that dealmakers are capitalizing upon any opportunistic
$8.7 $12.9 $32.9 $13.1 consolidation as well as closing deals sooner rather than later before financing
$0 0
2019 2020 2021 2022* conditions could turn.
Median M&A size ($M) in fintech in the Americas Median pre-money valuations ($M) by stage in fintech in the Americas
2019–2022* 2019–2022*
$160 $145.0 $260.0 $257.5
$140
$120 $160.0
$100
$75.0 $107.1
$80 $64.8
$50.0 $75.0
$60 $60.0
$28.0 $35.0
$40 $15.0
$10.0
$20 $7.0 $7.5
$0 2019 2020 2021 2022*
2019 2020 2021 2022* Angel & seed Early-stage VC Late-stage VC
#fintechpulse
37
M&A volume continues to slide

Total investment activity (VC, PE, M&A) in fintech in the Americas M&A activity in fintech in the Americas
2019–2022* 2019–2022*
$90 900 $90 140
$80 800 $80

120
$70 700 $70
100
$60 600 $60
$50 500 $50 80
$40 400 $40 60
$30 300 $30

40
$20 200 $20
$10.1
$9.6
$7.5
20
$6.0
$5.7
$4.4
$4.4
$3.6
$10
$13.1
$76.9
$12.2
$36.7
$3.2
$10 100
$10.6
$17.0
$83.8
$12.3
$18.7
$45.0
$25.4
$27.5
$32.8
$26.8
$22.7
$16.8
$9.4
$9.2
$8.3
$0 0 $0 0
2019 2020 2021 2022 2019 2020 2021 2022
#fintechpulse
38
VC invested stays relatively healthy

Venture activity in fintech in the Americas VC activity in fintech with corporate participation in the Americas
2019–2022* 2019–2022*
$25 800 $14 250
700 $12
$20 200
600
$10
500
$15 150
$8
400
$6
$10 100
300
$4
200
$5 50
$2
100
$12.1
$15.0
$15.3
$21.8
$17.0
$15.6
$11.7
$2.8
$2.3
$2.4
$1.3
$2.9
$2.4
$3.9
$3.7
$4.7
$7.9
$8.2
$7.5
$5.6
$5.8
$6.3
$3.7
$4.5
$6.1
$4.4
$6.1
$7.9
$0 0 $0 0
2019 2020 2021 2022 2019 2020 2021 2022
Deal value ($B) Deal count Angel & seed Early-stage VC Late-stage VC Deal value ($B) Deal count
#fintechpulse
39
Americas
Top 10 fintech deals in the Americas in H1 2022
10
6
1. Bottomline Technologies — $2.6B, Portsmouth, US — Institutional/B2B —
Public-to-private buyout
8 2. SimpleNexus — $1.2B, Lehi, US — Lending — M&A
2
3. Technisys — $1.1B, Miami, US — Institutional/B2B — M&A
1 4
7 4. Ramp — $748.3M, New York, US — Institutional/B2B — Series C
5 3
5. Finxact — $650M, Jacksonville, US — Institutional/B2B — M&A
9
6. Fireblocks — $550M, New York, US — Blockchain/cryptocurrency — Series E
7. Forge Global — $532.5M, San Francisco, US — Capital markets — Reverse

merger
8. Crusoe Energy Systems — $505M, Denver, US — Institutional/B2B — Series C
9. FTX — $500M, Nassau, Bahamas — Blockchain/cryptocurrency — Series C
10. Liquidity Group — $475M, New York, US — Institutional/B2B — Late-stage VC
#fintechpulse
40
In H1 2022, investment in
fintech companies in
Europe, Middle East and
Africa (EMEA) recorded
$26.6B with 939 deals
#fintechpulse
41
Regional insights EMEA
“
EMEA attracts $26.6 billion in fintech investment, including record $16.6 billion in VC
Open banking has for
funding, in H1’22 some time offered so much
Total fintech investment in the EMEA region dropped from $31.6 billion to $26.6 billion between H2’21 and H1’22, driven by a decline in opportunity. However, it
M&A deal value — which sank from $15.7 billion in H2’21 to $7.2 billion in H1’22. The region saw only two $1 billion+ M&A deals during has been somewhat
H1’22: the $3.9 billion merger of Italy-based Nexi and SIA and the $1.8 billion acquisition of UK-based Interactive Investor by Abrdn. perceived by incumbents
Despite the decline in M&A and rapidly evolving geopolitical and macroeconomic challenges, fintech-focused VC and PE funding was as a regulatory compliance
incredibly robust in H1’22. VC investment rose from $14.3 billion to $16.6 billion between H2’21 and H1’22 — slightly eclipsing the program with many banks
previous record high of $16.4 billion set in H1’21. PE funding also saw a record high of $2.8 billion in H1’22, including a quarterly record of needing to manage a
$2.1 billion in Q1. Key H1’22 highlights from the EMEA region include: significant uplift in
technology capability to
Banks transforming into tech companies focused on growth, saw its valuation drop 85 percent compared to meet the standards. More
last year6). recently though, we are
In the EMEA region, some banks that have developed AML and
seeing this capability being
AI-focused solutions and tools in-house are now looking at how There is now a lot more emphasis on business fundamentals
a key focus in how banks,
they can commercialize these to other financial institutions. During when making investment decisions, evaluating the sustainability
powered by fintech
H1’22, Belgian bank KBC launched a new subsidiary focused on of business models, how profits are generated, and whether cash
partners, are offering new
bringing its AI applications and tools to other banks, with the first is being generated or consumed for growth.
services that streamline
product targeted at combating financial crime.5
Embedding finance and banking as a service high on the account opening, lending
”
Investors focusing on business fundamentals agenda and financial insights.
Faced with numerous uncertainties, including the Russia-Ukraine Profitable players such as Starling Bank7 and ClearBank8 that
conflict, rising inflation, and rising interest rates, investors in the facilitate non-financial companies to move into financial services Anna Scally
Partner
EMEA region have shifted their primary focus from growth to have been able to raise extra funding to grow their expansion KPMG in Ireland
value. Valuation multiples have decreased significantly for some further.
players (e.g., buy-now-pay-later giant Klarna which heavily
5 https://www.globenewswire.com/news-release/2022/03/07/2397559/0/en/KBC-Group-launches-its-own-AI-fintech-DISCAI-a-separate-legal-entity.html
6 https://techcrunch.com/2022/07/11/klarna-confirms-800m-raise-as-valuation-drops-85-to-6-7b/
7 https://www.finextra.com/newsarticle/40133/starling-bank-lifts-valuation-to-25-billion-on-1305-million-internal-raise
8 https://techcrunch.com/2022/03/18/clearbank-a-uk-banking-rails-provider-raises-230m-from-apax-to-expand-into-europe-and-the-u-s/
#fintechpulse
42
“
Regtech automation gaining attention Trends to watch for in H2’22
Regtech has been hot in
Juggling the ongoing avalanche of regulation in the EMEA region • Investors spending more time with their current investment the EMEA region in the
and the constant need for more resources to manage portfolio companies to help them through the uncertainty that last few months. In
compliance has been a major struggle for businesses. With exists rather than focusing on diversification and new particular, there has been
inflation driving operating costs up, there is further increasing investments. strong interest in AML
interest in affordable compliance solutions and regtech applications as banks
• Rising interest rates giving banks more cash to spend and
automation that can help make compliance affordable, efficient, struggle with the list of
more ammunition to invest in strategic players.
and manageable. sanctions, embargos, and
• Increasing consolidation across the fintech space as investors
other measures they need
Regulatory environment for blockchain continuing to become more discerning, weaker fintechs struggle to survive,
evolve to implement. Right now,
and well-capitalized companies look to take out some of their
AML is at the very top of
During H1’22, the blockchain space reached a significant competition.
the agenda for many of
milestone in Europe with the publication of the Regulation on the • Fintechs focused on broader ESG and sustainable finance the banks and financial
”
EU pilot regime for market infrastructures that use distributed starting to secure more funding than has been seen to-date as institutions in the region.
ledger technologies9. The regime is effectively a regulatory regulators have made clear their expectations on firms
sandbox. This new program aims to breathe extra institutional monitoring and managing their financial risks.11 The Dave Remue
interest into blockchain technology in financial services along Director
investment of capital markets actor Euroclear in Greenomy is KPMG in Belgium
with the much anticipated Markets in Crypto Assets Framework a case-in-point.12
(MiCA), and the growing interest in central bank digital
• The fallout of the collapse of the crypto space and any side
currencies, with the digital euro potentially to come as soon as
effects it has on the traditional investment world and on future
2026.10
regulatory action.
9 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0858&from=EN
10 https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220516~454821f0e3.en.html
11 https://home.kpmg/xx/en/home/insights/2022/02/esg-regulatory-essentials.html
12 https://www.finextra.com/newsarticle/39608/euroclear-invests-in-sustainable-finance-platform-greenomy
#fintechpulse
43
After a record year, 2022 dealmaking slows, yet does not collapse
Total investment activity (VC, PE and M&A) in fintech in EMEA Venture activity in fintech in EMEA
2019–2022* 2019–2022*
$100 2,156 2,500 $35 1,728 2,000
$30
$80 2,000
$25 1,500
1,414 1,120 1,171
$60 1,368 1,500 $20 774
939 1,000
$40 1,000 $15
$10 500
$20 500
$5
$68.3 $27.9 $82.6 $26.6 $8.5 $10.2 $30.7 $16.6
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
M&A activity in fintech in EMEA PE growth activity in fintech in EMEA

2019–2022* 2019–2022*
$70 378 400 $3.5 60
50
$60 $3.0 44 50
$50 300 $2.5 37
204 206 40
$40 $2.0 29
200 30
$30 136 $1.5
20
$20 100 $1.0
$10 $0.5 10
$59.1 $16.6 $48.7 $7.2 $0.7 $1.1 $3.2 $2.8
$0 0 $0.0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
#fintechpulse
44
Medians for financing metrics remain resilient

VC activity in fintech with corporate participation in EMEA Corporate players remain integral in European venture funding conditions for fintechs,
2019–2022*
joining in a robust tally of deal value in associated rounds across a healthy volume as
$15 460 500
well. Likely thanks in part to that driver, as well as sustained demand for exposure to
400 fintech innovation, pre-money valuations have yet to slide at all. Elevated levels of dry
$10 268 powder also support pricing conditions to some degree. It remains to be seen if
241 300
210
growing economic pressures or the actualization of recession could finally deal a blow
200
$5 to the relatively resilient flow of VC, so the rest of the year could see trends shift more
100 substantially. However, M&A dealmakers still seem willing to pay up considerable
$3.8 $4.9 $13.2 $8.0 sums for targets.
$0 0
2019 2020 2021 2022*
Median M&A size ($M) in fintech in EMEA Median pre-money valuations ($M) by stage in fintech in EMEA
2019–2022* 2019–2022*
$50 $44.0 $59.3
$57.0
$39.3
$40
$27.9
$30
$20.7 $21.8
$20 $15.8 $15.0 $15.3
$9.8 $11.0
$3.7 $5.9 $5.6
$10 $4.1
$0 2019 2020 2021 2022*

2019 2020 2021 2022* Angel & seed Early-stage VC Late-stage VC
Note: The median M&A size in 2022* is based on a population where n = 22.
#fintechpulse
45
M&A volume slides again, but it remains to be seen whether it could rebound
Total investment activity (VC, PE and M&A) in fintech in EMEA M&A activity in fintech in EMEA
2019–2022* 2019–2022*
$60 700 $60 120
600
$50 $50 100
500
$40 $40 80
400
$30 $30 60
300
$20 $20 40
200
$10 20
$5.0
$10
$4.8
$4.9
$4.5
100
$4.0
$2.2
$2.6
$2.8
$2.9
$1.8
$50.4
$13.0
$24.4
$11.7
$2.1
$52.4
$15.5
$32.1
$18.9
$20.4
$11.2
$15.4
$11.1
$1.0
$0.0
$8.5
$6.6
$6.6
$0 0
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019 2020 2021 2022
2019 2020 2021 2022
#fintechpulse
46
VC activity stays strong even in volatile environment

Venture activity in fintech in EMEA VC activity in fintech with corporate participation in EMEA
2019–2022* 2019–2022*
$10 500
$6 140
$9 450
120
$8 400 $5
$7 350 100
$4
$6 300
80
$5 250
$3
$4 200 60
$3 150 $2
40
$2 100
$1
$1 50 20
$2.2
$2.9
$2.2
$1.7
$1.7
$1.7
$3.9
$2.5
$7.3
$9.1
$7.4
$6.9
$8.3
$8.3
$1.7
$2.8
$1.1
$0.9
$0.9
$0.9
$0.7
$1.2
$1.3
$3.1
$2.9
$4.7
$2.5
$5.2
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019 2020 2021 2022
2019 2020 2021 2022
Deal value ($B) Deal count Angel & seed Early-stage VC Late-stage VC
#fintechpulse
47
EMEA
Top 10Topglobal fintech deals in 2020

10 fintech deals in EMEA in H1 2022
1. Sia (Milan) — $3.9B, Milan, Italy — Payments — M&A 2

4
2. Interactive Investor — $1.8B, Leeds, UK — Wealth/investment
management — M&A 10
9
3. FNZ — $1.4B, London, UK — Wealth/investment management — PE growth 8
5
4. Trade Republic — $1.15B, Berlin, Germany — Capital markets — Series C
5. Checkout.com — $1B, London, UK — Payments/transactions — Series D 3
6
6. SumUp — $626.6M, London, UK — Payments/transactions — Late-stage VC 7
7. Qonto — $549.8M, Paris, France — Banking — Series D

1
8. Scalapay — $524M, Milan, Italy — Payments/transactions — Series B
9. Market Financial Solutions — $398.05M, London, UK — Lending —

Late-stage VC
10. Lunar — $314.05M, Aarhus, Denmark — Payments/transactions — Series D

Source: Pulse of Fintech H1'22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of
30 June 2022.
#fintechpulse
48
In H1 2022, fintech
companies in Asia
Pacific received
$41.8B with 607 deals
#fintechpulse
49
Regional insights ASPAC
“
$27.9 billion Afterpay acquisition propels fintech investment in Asia-Pacific to record
There were a couple of
high at mid-year very big corporate M&A
deals in the Asia-Pacific
Fintech investment in the Asia-Pacific region hit an annual record high of $41.8 billion with 6 months left in 2022, largely driven by region during the first half
Block’s $27.9 billion acquisition of Australia-based Afterpay. The region saw a diversity of jurisdictions attract good-sized deals during of 2022, including Block’s
H1’22. In addition to the Afterpay acquisition, Australia saw the $1 billion merger of Superhero and Swiftx, Japan saw the $2.1 billion mega-acquisition of
buyout of Yayoi by KKR, Singapore-based Coda Payments raised $690 million, Indonesia-based Xendit raised $300 million, and India- Afterpay and the merger of
based fintechs Stashfin and Oxyzo raised $270 million and $237 million respectively. Fintech investment in China remained limited Superhero and Swiftx.
during H1’22; the largest fintech deal in the country was a $140 million raise by corporate expense management company Fenbeitong. Given the increasing
Key H1’22 highlights from the Asia-Pacific region include: pressure on valuations, we
could see more M&A
Hyped fintech subsectors starting to cool off and compliance. Open data also saw solid investment during activity in H2’22 as
H1’22, in addition to infrastructure companies focused on the corporates look for good
In the Asia-Pacific region, a number of fintech subsectors that
crypto space. opportunities to buy out
attracted substantial interest and hype over the past 12 to 24
months cooled off considerably during H1’22, including retail Modernization of financial systems continues to drive their competitors in less
payments, insurtech, and B2C solutions. Crypto, NFTs and activity mature markets and
blockchain also came off the investment burner as well. startups look to consolidate
In many parts of the Asia-Pacific region, particularly jurisdictions in order to gain market
New challenges, new priorities for investment outside of China, the infrastructure underpinning existing financial share and improve their
”
markets is viewed as quite aged — from the technologies used profitability.
While investment in areas that saw significant interest during the
directly by exchanges to different payments rails. This is driving a
height of the COVID-19 pandemic have lost some attractiveness,
significant amount of investment towards the innovation of
areas that align with rapidly evolving global issues — including Andrew Huang
financial market infrastructure and to the digital last mile of Partner
rising inflation, increasing interest rates, geopolitical uncertainty, KPMG China
transactions.
and supply chain woes — have continued to see investment. Key
areas that garnered attention from investors in the Asia-Pacific
region during H1’22 included supply chain management,
cybersecurity and privacy, identity management, and governance
#fintechpulse
50
“
Digital transformation a government priority in China Trends to watch for in H2’22
In the Asia-Pacific region,
In China, digital transformation continues to be a significant • Regulators continuing to focus on making industry changes to there’s been a big focus on
government priority. During H1’22, The People’s Bank of China support open banking and decentralized finance in an orderly modernization, so it’s not
released its Fintech Development Plan (2022-2025), which and safe way. surprising that we’re still
stressed its commitment to appropriate regulation, privacy and seeing a good number of
• Investors taking a more focused approach to their investments,
data protection, low carbon and green fintech, and fair and investments focused on
prioritizing investments in companies with very strong business
inclusive financial services. While fintech investment in China digital modernization and
models and distinctive value propositions.
was quite soft in H1’22, companies focused on infrastructure infrastructure. Areas like
plays and partnerships with traditional financial institutions still • Growing focus on B2B solutions and tech enablement of
green finance,
gained attention from investors, while insurtechs focused on traditional players, rather than standalone fintech plays —
cybersecurity, and B2B
similar plays also began to attract interest. particularly in China.
solutions are also expected
• Challenger banks continuing to grow, although at a relatively to remain attractive to
slow pace. investors in the region. But
while these areas might
show some resilience as
we likely head into a global
recession, other fintech
subsectors could take a big
hit — including retail
focused crypto and B2C
”
focused fintech.
Anton Ruddenklau
Global Fintech Leader,
Partner and Head of Financial
Services Advisory
KPMG in Singapore
#fintechpulse
51
A blockbuster transaction and healthy volume combine for a massive tally by midyear
Total investment activity (VC, PE and M&A) in fintech in Asia Pacific Venture activity in fintech in Asia Pacific
2019–2022* 2019–2022*
$50 1,420 1,500 $25 1,270 1,500
$40 954 $20

930 860
1,000 821 1,000
$30 $15
607
537
$20 $10
500 500
$10 $5
$27.4 $15.5 $30.5 $41.8 $16.7 $11.8 $21.6 $8.7
$0 0 $0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
M&A activity in fintech in Asia Pacific PE growth activity in fintech in Asia Pacific
2019–2022* 2019–2022*
$35 140 $3.5 34 40
116
$30 120 $3.0
$25 86 100 $2.5 30
23
73 21
$20 80 $2.0
54 16 20
$15 60 $1.5
$10 40 $1.0 10
$5 $2.4 20 $0.5
$9.6 $5.8 $31.8 $1.2 $1.2 $3.1 $1.3
$0 0 $0.0 0
2019 2020 2021 2022* 2019 2020 2021 2022*
#fintechpulse
52
Valuations remain undaunted

VC activity in fintech with corporate participation in Asia Pacific Even relative to the headier conditions seen in 2019 through 2021, the late-stage
2019–2022* venture valuation in the Asia-Pacific region has surged to a remarkable tally. Outliers
$14 476 500
definitely skewed this metric, as can be seen in the top fintech financings for the region
$12
400 later in this report edition. However, it also speaks to the demand for exposure for the
$10 282 271 major fintech players that have successfully navigated growing political tensions and
$8 300
218
challenging economic conditions. As the region recovered from the pandemic, some
$6 200
national economies have relatively more bullish prospects than others, which has likely
$4
$2
100 also encouraged investors to invest more. Corporates still play a key role in supporting
$11.8 $8.1 $11.2 $4.7
$0 0 these financing metrics, as well.
2019 2020 2021 2022*
Median venture deal sizes ($M) by stage in fintech in Asia Pacific Median venture pre-money valuations ($M) by stage in fintech in Asia Pacific
2019–2022* 2019–2022*
$21.6 $541.6
$19.2
$17.0
$12.2
$187.4
$4.8 $5.0 $4.4 $5.2
$99.5
$2.3 $65.5 $51.0
$1.0 $1.0 $1.6 $10.4 $16.1 $8.5 $6.0 $14.7
$3.3 $3.1
2019 2020 2021 2022* 2019 2020 2021 2022*
Angel & seed Early-stage VC Late-stage VC Angel & seed Early-stage VC Late-stage VC
Source: The H1 2022 angel & seed median pre-money valuation figure is based on a non-normative sample size.
#fintechpulse
53
A blockbuster outlier deal pushes M&A value to a single-quarter high

Total investment activity (VC, PE and M&A) in fintech in Asia Pacific M&A in fintech in Asia Pacific
2019–2022* 2019–2022*
$40 450 $35 40
$35 400 35
$30
350
$30 30
$25
300
$25 25
$20
250
$20 20
M&A activity in fintech in Asia Pacific 200 $15
2019—2022* 15
$15
150
$10
$10 10
100
$3.2
$3.1
$5
$2.6
$2.8
5
$2.2
$5
$1.4
$1.5
50
$30.4
$12.3
$35.7
$1.0
$0.5
$0.2
$0.2
$0.2
$0.5
$0.6
$4.5
$9.7
$6.1
$4.3
$4.8
$8.7
$6.5
$4.4
$6.8
$7.0
$3.6
$0 0 $0 0
2019 2020 2021 2022 2019 2020 2021 2022
#fintechpulse
54
VC financing activity declines somewhat

Venture activity in fintech in Asia Pacific VC activity in fintech with corporate participation in Asia Pacific
2019–2022* 2019–2022*
$9 400 $8 140
$8 350 $7 120
$7
300 $6
100
$6
250 $5
$5 80
200 $4
$4M&A activity in fintech in Asia Pacific
2019—2022* 60
150 $3
$3
40
100 $2
$2
$0.7
50 $1 20
$1
$1.4
$1.9
$4.9
$8.5
$5.5
$2.5
$2.0
$1.8
$3.9
$4.2
$5.9
$7.6
$4.9
$3.8
$1.1
$4.7
$1.2
$2.4
$7.6
$4.4
$1.4
$1.2
$1.5
$2.1
$2.9
$2.6
$2.1
$0 0 $0 0
2019 2020 2021 2022 2019 2020 2021 2022
Deal value ($B) Deal count Angel & seed Early-stage VC Late-stage VC Deal value ($M) Deal count
#fintechpulse
55
7 2
1. Afterpay — $27.9B, Melbourne, Australia — Payments — M&A
8 2. Yayoi — $2.1B, Tokyo, Japan — Institutional/B2B — Corporate divestiture
9 10 3. Superhero — $1.06B, Sydney, Australia — Wealth/investment management —

M&A
4 6
4. Coda Payments — $690M, Singapore — Payments/transactions —
Recapitalization/growth
5 5. Xendit — $300M, Jakarta, Indonesia — Payments/transactions — Series D
6. Funding Societies — $294M, Singapore — Lending — Series C

3 7. Stashfin — $270M, Delhi, India — Lending — Series C
8. Oxyzo — $237.1M, Gurgaon, India — Lending — Series A
9. Slice — $220M, Bengaluru, India — Payments/transactions — Series B

1
10. Voyager Innovations — $210M, Mandaluyong City, Philippines —
Payments/transactions — PE growth
#fintechpulse
56
About us
Global insights | Fintech segments | Featured interview | Spotlight article | Regional insights
KPMG’s Global Fintech practice

The financial services industry is transforming with
the emergence of innovative new products,
channels and business models. This wave of
change is driven primarily by evolving customer
expectations, digitalization as well as continued
regulatory and cost pressures.
KPMG firms are passionate about supporting clients

to successfully navigate this transformation,
mitigating the threats and capitalizing on the
opportunities.
KPMG Fintech professionals include partners and

staff in over 50 fintech hubs around the world,
working closely with financial institutions and fintech
companies to help them understand the signals of
change, identify the growth opportunities and to
develop and execute their strategic plans.
Visit home.kpmg/fintech
#fintechpulse
57
Contacts
Get in touch with us

Anton Ruddenklau John Hallsworth
Global Leader of Fintech, Partner, Open Banking Lead,
Partner and Head of Financial Services Advisory, KPMG in the UK
KPMG in Singapore E: [email protected]
E: [email protected]
Shelley Doorey-Williams, Partner, Wealth and Asset Management
Judd Caplain Consulting, KPMG in the UK
Global Head of Financial Services E: [email protected]
KPMG International
E: [email protected] Andrew Huang
Partner and Fintech Leader, KPMG China
Courtney Trimble E: [email protected]
Global Leader of Payments,
Principal, Financial Services, KPMG in the US Anna Scally
E: [email protected] Partner and Fintech Leader, KPMG in Ireland
E: [email protected]
Fabiano Gobbo
Global Head of Regtech, Ilanit Adesman
Partner, Risk Consulting, KPMG in Italy Partner, Financial Risk Management, KPMG in Israel
E: [email protected] E: [email protected]
Ram Menon Gary Chia

Global Head, Insurance Deal Advisory Partner and ASEAN Financial Services Regulatory and Compliance
KPMG International Practice Leader, KPMG in Singapore
Geoff Rush Bob Ruark

Partner, Advisory and National Industry Leader, Financial Services, Principal, Financial Services Strategy and Fintech Leader,
KPMG in Canada KPMG in the US
#fintechpulse
58
About the report
Acknowledgements
We acknowledge the contribution of the following individuals across KPMG member firms who assisted in the development of this publication:
• Anton Ruddenklau, Global Leader of Fintech, Partner and Head of Financial • Mike Louw, Partner, Head of M&A, KPMG South Africa
Services Advisory, KPMG in Singapore • Bernd Oppold, Partner, KPMG in Germany
• Ilanit Adesman, Partner, Financial Services Risk Management and Insurtech • Bill Packman, Partner and Wealth Management Consulting Lead, KPMG in
Lead, KPMG in Israel the UK
• Ricardo Anhesini, Head of Financial Services LATAM, KPMG Brazil • Dave Remue, Fintech Advisory Lead, KPMG in Belgium
• Spencer Burness, Director, Advisory Services, KPMG in the US • Barnaby Robson, Partner, Deal Advisory, KPMG China
• Gary Chia, Partner and ASEAN Financial Services Regulatory and Compliance • Robert Ruark, Principal, Financial Services Strategy and Fintech Leader, KPMG
Practice Leader, KPMG in Singapore in the US
• Shelley Doorey-Williams, Partner, Wealth and Asset Management Consulting, • Karin Sancho, Head of Financial Services, KPMG in Sweden
KPMG in the UK
• Anna Scally, Partner and Fintech Leader, KPMG in Ireland
• Sanjay Doshi, Partner and Head of Financial Services Advisory, KPMG in India
• Eric Scaringe, Senior Manager, Tax, KPMG in the US
• Maricarmen Garcia, Financial Services Regulatory and Compliance Risk Partner,
KPMG Mexico • Ovais Shahab, Head of Financial Services, KPMG in Saudi Arabia
• Fabiano Gobbo, Global Head of Regtech, Risk Consulting Partner, KPMG in Italy • Alexandre Stachtchenko, Director Blockchain & crypto assets, KPMG France
• John Hallsworth, Partner, Open Banking Lead, KPMG in the UK • Craig Thomason, Contributing Executive, KPMG in the US
• Andrew Huang, Partner and Fintech Leader, KPMG China • Courtney Trimble, Global Head of Payments, Principal, Financial Services,
KPMG in the US
• Scott Huie, Managing Director, KPMG in the US
• Gonçalo Traquina, Partner, Advisory KPMG in the Lower Gulf region
• Charles Jacco, Americas Cyber Security Services, Financial Services Leader and
Principal, KPMG in the US
#fintechpulse
59
About the report
Methodology
The underlying data and analysis for this report (the “Dataset”) was provided by PitchBook Data, Inc the investors and/or press release state that a round is a seed financing, or it is for less than $500,000 and is
(“PitchBook”) on 7 July 2022 and utilizes their research and classification methodology for transactions as the first round as reported by a government filing, it is classified as such. If angels are the only investors, then a
outlined on their website at https://help.pitchbook.com/s/. The Dataset used for this report considers the round is only marked as seed if it is explicitly stated.
following investment transactions types: Venture Capital (including corporate venture capital) (“VC”), private
Early-stage VC: Rounds are generally classified as Series A or B (which PitchBook typically aggregates
equity (“PE”) Investment and Mergers and Acquisitions (“M&A”) for the FinTech vertical within the underlying
together as early stage) either by the series of stock issued in the financing or, if that information is unavailable,
PitchBook data. Family and friends, incubator and accelerator type funding rounds are excluded from the
by a series of factors including: the age of the company, prior financing history, company status, participating
Dataset.
investors and more.
Due to the private nature of many of the transactions, the Dataset cannot be definitive, but is an estimate
Late-stage VC: Rounds are generally classified as Series C or D or later (which PitchBook typically
based on industry leading practice research methodology and information available to PitchBook at 7 July
aggregates together as late stage) either by the series of stock issued in the financing or, if that information is
2022. Similarly, due to ongoing updates to PitchBook’s data as additional information comes to light, data
unavailable, by a series of factors including: the age of the company, prior financing history, company status,
extracted before or after that date may differ from the data within the Dataset.
participating investors, and more.
Only completed transactions regardless of type are included in the Dataset, with deal values for general M&A
Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both
transactions as well as venture rounds remaining un-estimated if this information is not available or reliably
firms investing via established CVC arms or corporations making equity investments off balance sheets or
estimated.
whatever other non-CVC method actually employed.
Venture capital deals Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other
PitchBook venture financings are included in the Pulse of Fintech as of March 2018.
PitchBook includes equity investments into startup companies from an outside source. Investment does not
necessarily have to be taken from an institutional investor. This can include investment from individual angel
Private equity investments
investors, angel groups, seed funds, venture capital firms, corporate venture firms and corporate investors.
Investments received as part of an accelerator program are not included, however, if the accelerator continues PitchBook includes both buyout investors, being those that specialize in purchasing mainly a controlling interest
to invest in follow-on rounds, those further financings are included. of an established company (in a leveraged buyout) and growth/expansion investors, being those that focus on
investing in minority stakes in already established businesses to fund growth. Transaction types include:
Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the
leveraged buyout (“LBO”); management buyout; management buy-In; add-on acquisitions aligned to existing
company to date and it cannot determine if any PE or VC firms are participating. In addition, if there is a press
investments; secondary buyout; public to private; privatization; corporate divestitures; and growth/expansion.
release that states the round is an angel round, it is classified as such. Finally, if a news story or press release
only mentions individuals making investments in a financing, it is also classified as angel. As for seed, when
#fintechpulse
60
About the report
Methodology (cont’d)
M&A transactions 3. Lending — any non-bank who uses a technology platform to lend money often implementing
alternative data and analytics OR any company whose primary business involves providing data and
PitchBook defines M&A as a transaction in which one company purchases a controlling stake in another analytics to online lenders or investors in online loans.
company. Eligible transaction types include control acquisitions, leveraged buyouts (LBOs), corporate
4. Proptech — companies that are classified as both fintech AND also who are developing and
divestitures, reverse mergers, mergers of equals, spin-offs, asset divestitures and asset acquisitions. Debt
leveraging technology intended to help facilitate the purchase, management, maintenance and
restructurings or any other liquidity, self-tender or internal reorganizations are not included. More than
investment into both residential and commercial real estate. This includes sub-sectors such as
50 percent of the company must be acquired in the transaction. Minority stake transactions (less than a
property management software, IoT home devices, property listing and rental services, mortgage and
50-percent stake) are not included. Small business transactions are not included in this report.
lending applications, data analysis tools, virtual reality modeling software, augmented reality design
applications, marketplaces, mortgage technology and crowdfunding websites.
The fintech vertical
5. Insurtech — companies utilizing technology to increase the speed, efficiency, accuracy and
A portmanteau of finance and technology, the term refers to businesses who are using technology to operate
convenience of processes across the insurance value chain. This includes quote comparison
outside of traditional financial services business models to change how financial services are offered. Fintech
websites, insurance telematics, insurance domotics (home automation), peer-to-peer insurance,
also includes firms that use technology to improve the competitive advantage of traditional financial services
corporate platforms, online brokers, cyber insurance, underwriting software, claims software and
firms and the financial functions and behaviors of consumers and enterprises alike. PitchBook defines the
digital sales enabling.
FinTech vertical as “Companies using new technologies including the internet, blockchain, software and
algorithms to offer or facilitate financial services usually offered by traditional banks including loans, payments, 6. Wealthtech — companies or platforms whose primary business involves the offering of wealth
wealth or investment management, as well as software providers automating financial processes or addressing management services using technology to increase efficiency, lower fees or provide differentiated
core business needs of financial firms. Includes makers of ATM machines, electronic trading portals and offerings compared to the traditional business model. Also includes technology platforms for retail
point-of-sale software.” Within this report, we have defined a number of Fintech sub-verticals: investors to share ideas and insights both via quantitative and qualitative research.
1. Payments/transactions — companies whose business model revolves around using technology to 7. Regtech — companies that provide a technology-driven service to facilitate and streamline
provide the transfer of value as a service including both B2B and B2C transfers. compliance with regulations and reporting as well as protect from employee and customer fraud.
2. Blockchain/cryptocurrency — companies whose core business is predicated on distributed ledger

(blockchain) technology with the financial services industry AND/OR relating to any use case of
cryptocurrency (e.g. Bitcoin). This vertical includes companies providing services or developing technology
related to the exchange of cryptocurrency, the storage of cryptocurrency, the facilitation of payments using
cryptocurrency and securing cryptocurrency ledgers via mining activities.
#fintechpulse
61
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in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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Pulse of

Even amid volatility, deal flow continues

Global M&A activity in fintech Global PE growth activity in fintech

Venture valuations remain elevated

As of yet, it remains to be seen if the dip in Q2 2022 is a portent of trends to come

$20 800 250

$15 600 $10 200

Top 10Topglobal fintech deals in 2020

3 1. Afterpay — $27.9B, Melbourne, Australia — Payments — M&A

2. Sia (Milan) — $3.9B, Milan, Italy — Payments — M&A

3. Bottomline Technologies — $2.6B, Portsmouth, US — Institutional/B2B —

6. FNZ — $1.4B, London, UK — Wealth/investment management — PE growth

7. SimpleNexus — $1.2B, Lehi, US — Lending — M&A

9. Technisys — $1.1B, Miami, US — Institutional/B2B — M&A

10. Superhero — $1.06B, Sydney, Australia — Wealth/investment management —

Payments space continues to attract big investment in H1’22

Slowdown in investment in insurtech sector amid global uncertainty

Investor interest in cybersecurity remains hot in H1’22

Global investment in wealthtech soft in H1’22

29 Fragmented market driving corporate investment opportunities

Enabling the future: How fast-growing

Schimek sees bolttech’s partnership-based approach as a win-win value proposition because by

Looking to the future: Reaching bolttech’s full potential

Embedded finance fueled by cloud-based core banking technologies

Safety, soundness and customer expectations

Investors turning focus to profitability and cash flow

Financing metrics have yet to slide

M&A volume continues to slide

$80 800 $80

$50 500 $50 80

$40 400 $40 60

$30 300 $30

2019 2020 2021 2022 2019 2020 2021 2022

VC invested stays relatively healthy

Top 10 fintech deals in the Americas in H1 2022

8 2. SimpleNexus — $1.2B, Lehi, US — Lending — M&A

7. Forge Global — $532.5M, San Francisco, US — Capital markets — Reverse

8. Crusoe Energy Systems — $505M, Denver, US — Institutional/B2B — Series C

9. FTX — $500M, Nassau, Bahamas — Blockchain/cryptocurrency — Series C

10. Liquidity Group — $475M, New York, US — Institutional/B2B — Late-stage VC

M&A activity in fintech in EMEA PE growth activity in fintech in EMEA

Medians for financing metrics remain resilient

$0 2019 2020 2021 2022*

VC activity stays strong even in volatile environment

Top 10Topglobal fintech deals in 2020

1. Sia (Milan) — $3.9B, Milan, Italy — Payments — M&A 2

7. Qonto — $549.8M, Paris, France — Banking — Series D

9. Market Financial Solutions — $398.05M, London, UK — Lending —

10. Lunar — $314.05M, Aarhus, Denmark — Payments/transactions — Series D

$40 954 $20

Valuations remain undaunted

A blockbuster outlier deal pushes M&A value to a single-quarter high

VC financing activity declines somewhat

8 2. Yayoi — $2.1B, Tokyo, Japan — Institutional/B2B — Corporate divestiture

9 10 3. Superhero — $1.06B, Sydney, Australia — Wealth/investment management —

5 5. Xendit — $300M, Jakarta, Indonesia — Payments/transactions — Series D

6. Funding Societies — $294M, Singapore — Lending — Series C

8. Oxyzo — $237.1M, Gurgaon, India — Lending — Series A

9. Slice — $220M, Bengaluru, India — Payments/transactions — Series B

KPMG’s Global Fintech practice