Latest edition – H1 2021
2021 has seen an incredibly strong start to the year for the global fintech market. The rebound continued into H1’21, with very robust investment across VC, PE, and venture capital. We saw growing deal sizes in a wide variety of fintech subsectors — from wealthtech and regtech to crypto and cybersecurity. If there was a word that could be used to describe H1’21, it would be: diversity.
Some of the key trends we’ve seen globally so far this year:
— growing recognition that the consumers’ digital behaviors that accelerated due to the global pandemic are here to stay
— increasing interest and larger deal sizes in a broad range of fintech subsectors, including wealthtech and regtech
— growing interest in SPAC mergers, particularly in the US (e.g., SoFi, Clover Health, Payoneer, Metromile) — rising interest in cryptocurrencies and blockchain — not only from startups and investors, but also from governments and regulators
— corporates embracing M&A as a means to attain important capabilities, broaden customer offerings, and grow and scale
— fintechs and large tech companies embracing platform and ‘super app’ models.
Klarna powers Nordic region to new VC investment high of $2 billion
On a Nordic level Sweden attracted the majority of fintech investment during H1’21. The $4.8 billion in total fintech investment in the Nordics was primarily driven by three deals in Sweden: the $2.6 billion acquisition of trading platform company Itiviti by Broadridge Financial Solutions and two funding rounds totaling $1.9 billion by Sweden-based ‘buy now, pay later’ company Klarna.
The largest deal in Finland was a $25 million raise by digital asset lending solutions providing company Tesseract. The round was led by Augmentum Fintech. During the first part of the year, the Finnish fintech company Enfuce also raised significant funding. The company raised $8 million through a combination of debt and Series B venture funding in a deal led by Tencent Holding. Maki.vc and other undisclosed investors also participated in the round.
In the other Nordic countries, the largest deals included Norway-based Arcane Crypto’s $33 million SPAC merger with Vertical Ventures AB and a $23 million raise by Kompasbank in Denmark.
The M&A market in the Nordic region was incredibly robust in H1’21. In addition to the completed Itiviti acquisition, open banking platform Tink acquired Germany-based open banking platform FinTecSystems. Shortly thereafter, Visa announced its acquisition of Tink for $2.1 billion.
Top 8 fintech deals in Europe in H1 2021
- Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A
- Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A
- Paysafe Group — $1.45B, London, UK — Payments/transactions — Reverse merger
- Klarna — $1.29B, Stockholm, Sweden — Payments/transactions — Later VC
- Nutmeg — $989.4M, London, UK — Wealth/investment management — M&A
- Trade Republic — $900M, Berlin, Germany — Payments/transactions — Series C
- GoCo Group — $818.35M, Newport, UK — Consumer — M&A
- Mollie — $805.8M, Amsterdam, Netherlands — Payments/transactions — Series C
Top fintech trends for H2’21
During the first half of 2021, we saw interest in fintech grow to a fever pitch in most regions of the world. As we head into the second half of the year, this extraordinary momentum is expected to continue.
Here are KPMG’s top predictions for fintech in H2’21:
- Crypto will be a hot focus for investors
- M&A activity will continue to surge
- SPACs could steal the spotlight
- Cybersecurity will likely gain even greater prominence
- B2B services will gain attention across fintech subsectors
- Partnerships will be embraced by big techs and fintechs