New Delhi, Sep 7 : Fintech investment in the Asia-Pacific region hit a record-setting highest of $41.8 billion with 607 deals in the first quarter of the year, according to a report on Wednesday.The region was awash with a variety of jurisdictions that are able to offer big deals as per the KPMG in India report.
In the Asia-Pacific region, a range of fintech subsectors which attracted huge interest and hype in the past 12-24 months, cooled significantly in the period of time which includes consumer payments, insurtech and B2C services.
Blockchain, NFTs, and Crypto were also taken off the investment stove.
“Regulators continue to concentrate on making changes to the industry more so in countries like India to encourage an open and transparent banking system as well as decentralised finance in an efficient and secure manner,” the report mentioned.
“The fintech sector has seen an improvement in the valuation of companies and in investment flows globally and in India.The focus on scaling up is now being complemented by an emphasis on profitability and cash flow,” said Sanjay Doshi Head and Partner of Financial Services Advisory, KPMG in India.
The Reserve Bank of India’s recent guidelines on credit card licenses digital lending could cause many fintech firms, particularly the loan service providers as well as loan originators who are not regulated to review their business model and operational model.
“This segment is likely to be seeing an increase in deal flow activity, driven by investments in wealth technology, insurance tech, and M&A of Fintech NBFC’s” Doshi said.Doshi.
Global investment in fintech dropped to $107.8 billion despite the robust VC funding.
The Americas represented the biggest quantity of VC investment ($27.2 billion) and EMEA set a record for a six-month period ($16.6 billion) according to the report.
Investment in the space of payments was very robust with $43.6 billion in investment, compared to $60.3 billion recorded during the whole of 2021.
The amount of investment in the insurtech industry fell significantly, with $3.8 billion of investments across the globe during H1 2022 -well from the $14.8 billion in investment in 2021.
The volatility in the world’s public markets affected the valuations of numerous publicly traded tech firms in H1 2022.This includes fintechs.
This, in conjunction with other market challenges this brought IPO activity close to a stop — a pattern that is expected to continue until 2022’s H2 period, according to the report.
“2021 was a record year for fintech worldwide which means that the first quarter of 2022 seem slow in contrast,” said Anton Ruddenklau who is the Global Director of Financial Services Innovation and Fintech, KPMG International.
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