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Record-breaking VC investment in fintech in first half of 2021

KPMG’s Pulse of Fintech reveals investment hit US$98 billion.

KPMG’s Pulse of Fintech reveals investment hit US$98 billion.

  • US$98 billion in fintech investment (M&A, PE and VC) in H1’21, compared with $121.5 billion during all of 2020.
  • Global VC investment in fintech reached a record $52.3 billion in H1’21 – more than doubling the $22.5 billion seen in H2’20.

Overall global fintech funding across M&A, PE, and VC deals soared to a new high in H1’21, according to KPMG’s Pulse of Fintech, a bi-annual report on fintech investment trends. Dry powder cash reserves, increasing diversification in hubs and subsectors, and strong activity across the world contributed to the record start to 2021, with funding increasing from US$87.1 billion in H2’20 to US$98 billion in H1’21.

Fintech valuations remained very high in H1’21 as investors continued to see the space as attractive and well-performing – a likely driver in the explosion of unicorn births with 163 created in the first half of the year.

Under pressure to increase the velocity of their digital transformation and to enhance their digital capabilities, corporates were particularly active in venture deals, participating in close to $21 billion in investment over nearly 600 deals globally, with many realizing it’s quicker to do so by partnering with, investing in, or acquiring fintechs.


Overall investment in fintech surged to a record high in the first half of 2021 as investors, particularly corporates and VC investors, made big bets on market leaders in numerous jurisdictions and across almost all subsectors

Large funding rounds, high valuations and successful exits underscore the thesis that digital engagement of customers that accelerated during the pandemic is here to stay.


Ian Pollari
KPMG’s Global Fintech Co-Lead


Investment surges to over $42.1 billion in the US and $51.4 billion across the Americas

Overall fintech investment in the US remained robust in H1’21, reaching $42.1 billion. VC investment in the US was particularly strong, surging past 2020’s peak high of $22 billion to reach over $25 billion in H1’21. Big deals included a $3.4 billion raise by Robinhood, a $600 million raise by Stripe, and $500 million raises by Better, ServiceTitan, and DailyPay.

The maturation of the fintech sector was evident in the robust exit activity in the US, including Affirm’s successful IPO, the direct listing of Coinbase, the SPAC merger of SoFi with Social Capital Hedosophia Holdings Corp. V, and the SPAC merger of insurtech Clover Health with Social Capital Hedosophia Holdings Corp. III.

Across the Americas more broadly, fintech investment was also very strong, reaching $51.4 billion in H1’21. VC investment accounted for $31 billion of this total—shattering the previous annual high of $24 billion set in 2020. Continued innovations in financial technology, combined with the dramatic increase in use of digital offerings has made fintech one of the most active sectors of investment, both from a VC perspective and from an M&A standpoint.

The global trend of increasing corporate participation in investment was particularly pronounced in the Americas during H1’21, with $12.8 billion of investment in the first half of the year, compared to $11.4 billion during all of 2020.

Europe sees record-breaking VC investment

Overall fintech investment in the EMEA region continued to surge, with over $39 billion invested in H1’21, compared to 2020’s annual total of $26 billion. The region also shattered its previous annual high for fintech-focused VC investment—attracting $15 billion in H1’21, compared to $9 billion during all of 2020.

The UK led the way with $24.5 billion of fintech investment, including a $14.8 billion M&A deal by Refinitiv —followed by the Nordic region ($4.8 billion), Germany ($2.5 billion), and France ($2 billion). The $4.8 billion in total fintech investment in the Nordic region 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 ‘buy now, pay later’ company Klarna.

In H1’21, the EMEA region saw a much broader array of fintech hubs attracting large investments than in the past—from the $800 million PE investment in Abu Dhabi-based Group 42 and the $600 million PE buyout of Ireland-based Fenergo to $100 million+ VC funding rounds in the Netherlands (i.e., Mollie, Bunq), France (e.g., Ledger, Market Pay, Shift Technology, Alan, and others), Austria (i.e., BitPanda), the Czech Republic (Twisto), and Saudi Arabia (Tamara).

Corporate VC-affiliated investment in the EMEA region soared to a record high of $5.2 billion in H1’21, compared to $5.1 billion in all of 2020.

Total investment in Asia-Pacific region rebounds in H1’21

Total fintech investment (M&A, VC and PE) and deals activity in the Asia-Pacific region saw a solid rebound in the first half of 2021. After falling to $4.7 billion across 357 deals in H2’20, H1’21 saw $7.5 billion in investment across 467 deals – in large part driven by venture capital activity.

India led the way with $2 billion in total fintech investment, followed by China ($1.3 billion) and Australia ($900 million). The top ten deals in the Asia-Pacific region reflected incredible geographic diversity in H1’21, including South Korea (toss), Indonesia (Gojek), India (Pine Labs, CRED and Razorpay and KreditBee), the Philippines (Mynt), Australia (86400) and China (MediTrust). This diversity highlights the ongoing evolution and maturation of fintech hubs across the region.

Platform players with strong fintech offerings remained very hot in the Asia-Pacific region. Indonesia-based Gojek raised $300 million in H1’21, while also announcing a merger with payments and eCommerce platform Tokopedia.

Given the explosion of US-based SPACs in recent months, startups—including mature fintechs— in the Asia-Pacific region are expected to see more interest from US-based SPACs over the next six months. During H1’21, Singapore-based super-app company Grab announced the largest SPAC merger ever: a $40 billion deal with US-based Altimeter Growth Corp, which is expected to be finalized in H2’21

Strong outlook ahead

Looking forward to H2’21, total fintech investment is expected to remain very robust in most regions of the world. While the payments space is expected to remain a dominant driver of fintech investment, revenue-based financing solutions, banking-as-a-service models, and B2B services are expected to attract increasing levels of investment. Given the rise in digital transactions, and the subsequent increase in cyberattacks and ransomware, cybersecurity solutions will likely also be high on the radar of investors.


Fintech is an incredibly hot area of investment right now—and that’s not expected to change anytime soon given the increasing number of fintech hubs attracting investments and growing deal sizes and valuations.

As we head into H2’21, we anticipate more consolidation will occur, particularly in mature fintech areas as fintechs look to become the dominant market player either regionally or globally.


Anton Ruddenklau
KPMG’s Global Fintech Co-Lead


H1’21—Key Highlights

  • Global fintech investment reached US$98 billion across 2,456 deals in H1’21 – far outpacing last year’s annual total of $121.5 billion across 3,520 deals.
  • M&A deals continued at a very healthy pace, accounting for $40.7 billion across 353 deals in H1’21, compared to $74 billion across 502 deals during all of 2020.
  • Late-stage venture valuations more than doubled year-over-year, with global median pre-money valuations for late stage deals rising from $135 million in 2020 to $325 million at the end of H1’21.
  • Corporate participation in VC investment in fintech was incredibly strong in H1’21, with US$20.8 billion of investment globally. Both the Americas (US$13 billion) and EMEA (US$5 billion) saw record levels of CVC-affiliated investment.
  • Global investment in cybersecurity reached a new annual record at mid-year—rising from US$2.2 billion in 2020 to over US$3.7 billion in H1’21.
  • Cross-border M&A deal value rose dramatically, from $10.3 billion during all of 2020 to $27.7 billion in H1’21 alone.
  • PE firms embraced the fintech space in H1’21, contributing $5 billion in investment to fintech— surpassing the previous annual high of $4.7 billion seen in 2018.
  • Total fintech investment in the Americas was very robust with over US$51 billion in investment across 1,188 deals.
  • The EMEA region saw US$39.1 billion in fintech investment in H1’21, including a record US$15.1 billion in VC funding.
  • Fintech investment in the Asia-Pacific region continued at a more moderate pace, reaching $7.5 billion across 467 deals, compared to $13.4 billion across 714 deals during all of 2020.

For media queries, please contact:

Brian O’Neill, Senior Manager, Global External Communications
T: +44 7823 668 689
E: brian.o’neill@kpmg.co.uk

About KPMG International

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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