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Global fintech investment plummets

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Investment in fintech companies is significantly lower than previous years as global interest appears to be falling, new figures have suggested. 

Accenture’s newest data says that in the first half of 2019, the total value of all the deals struck all over the world is $22 billion. For the same period last year, that figure stood at $31.2 billion.

Now, there could be multiple, varying reasons for the 29 per cent drop. Accenture says that investment activity in China has seen a steep decline in the period ending with June 30, mostly due to the trade war between China and the States, blaming the deteriorating relations between the two global powerhouses on the poor figures.

At the same time, the report also claims that there had been two per cent more deals in total, compared to the same time last year - 1,561. 

It seems as last year, there had been just one deal that made all the difference - Ant Financial Services (Alibaba Group HOlding affiliate and Alipay operator) raised $14 billion. Had it not been for this deal alone, this year’s figures would have actually been up 28 per cent.

The US is still the biggest market for fintech transactions. Investments were up 60 per cent in the country, hitting $12.7 billion. UK’s investments doubled to $2.6 billion.

“There’s been a lot of interest and demand from consumers for new fintech propositions, particularly in the UK and elsewhere in Europe. Fundraising is also moving to support the scaling up of challenger and collaborative fintech, which will cause lumpiness in some [funding] rounds,” said Julian Skan, a senior managing director in Accenture’s Financial Services practise. 

“However, the question is: How long can that last? Fundraising is likely to reach a plateau soon and will most likely dip going forward.”