Never before have investments in fintech companies been as high as in the first six months of this year. Worldwide investments amounted to $98 billion in the first half of 2021, compared to $121.5 billion over the whole of 2020. Over the same period, the number of investments by venture capitals actually more than doubled at $52.3 billion compared to $22.5 billion. In Europe, too, all records have been broken with more than $39 billion in investments in the first part of this year compared to $26 billion over the whole of 2020. At $805 million, the biggest single investment in the Netherlands was in payments company Mollie. This emerges from the biennial analysis in KPMG’s Fintech Pulse report.
The majority of fintech investments in Europe are attributable to the United Kingdom, totalling $24.5 billion including the acquisition of Refinitiv. The Scandinavian region follows, primarily driven by the Swedish acquisition of trading platform Itivitj by Broadridge Financial Solutions and two additional investments in the post-purchase payments company Klarna. Thanks to the capital injection in Dutch business Mollie, the value of the fintech company has now risen to $5.4 billion, more than half the market capitalisation of ABN AMRO. Dutch bank Bunq was also enriched with an investment of $227 million.
Investments in the Environmental, Social and Governance domain
Also striking is the strong focus on investments in the so-called Environmental, Social and Governance (ESG) domain, for instance in the areas of financial inclusion, carbon tracking and offsets. By way of example, start-up Carbon Equity secured €1.2 million in growth capital. The fintech company wants to tackle climate change by linking capital to climate technology in order to accelerate progress towards a future without fossil fuels.
“Investors and shareholders no longer want insight only into the direct financial returns in fintech companies. The origins of those investments and their impact on people, planet and society are also becoming ever more important questions. This explains the growing interest in investments in ESG-related fintech initiatives", notes Martijn Berghuijs, Partner Fintech Advisory at KPMG.
Great variety of fintech sectors
There is now a great variety of fintech sectors, such as the markets for legislation and regulations, digital currency, cybersecurity and welfare. It is expected that initiatives by the European Central Bank aimed at developing a digital euro, or CBDC, will also have a major impact on European fintech investments.
The total number of deals in the worldwide fintech market was 2456 in the first half of 2021. Compared to the 3520 deals over the whole of 2020, that represents a substantial increase. Mergers and acquisitions, corporate investments and investments by venture capitals continue to grow fast.
About KPMG Netherlands
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