FinTech funding worldwide surged 68 percent annually to $210 billion in 2021, a report by consultancy KPMG, a global network of professional firms providing audit, tax and advisory services, showed.
The report found that a record 5,684 deals were signed through mergers and acquisitions, private equity and venture capital last year, driven by sub-sectors such as payments and blockchain.
The payments segment continued to attract the lion’s share of funding among FinTech subsectors, accounting for $51.7 billion in investments globally.
It was followed by blockchain and cryptocurrencies, which attracted a record $30.2 billion last year, up from $5.5 billion in 2020 and more than three times the previous record of $8.2 billion in 2018, the report said.
Investment in FinTech companies in Europe, the Middle East, and Africa (Emea) region stood at $77.4 billion from 1,859 deals, said the report.
Cryptocurrencies and blockchain are expected to retain their investor appeal in 2022, according to KPMG, as increasing numbers of crypto companies seek regulatory guidance to grow and develop the sector, especially in places such as the UAE.
Additional support from government-backed entities in the UAE has also helped local FinTech start-ups. An increase in investment in decentralised finance in the Emea region and a stronger push for the development of a common regulatory framework for cryptocurrencies are also expected this year, the report said.
Globally, KPMG found that the largest FinTech deals in the second half of 2021 included the $9.2 billion acquisition of Denmark-based payments processor Nets by Italy-based Nexi, the $3.75 billion mergers of FinTech cloud platform company Calypso Technology and regulatory technology solutions provider AxiomSL to form Adenza in the US, and the $2.7 billion acquisition of Japan-based Paidy by PayPal.