APAC fintech investment more than doubles to USD41.8 billion in 2022 1H from 2H 2021, KPMG’s Pulse of Fintech finds
HONG KONG, 8 September 2022 /PRNewswire/ — Total investment in Asia-Pacific the region’s fintech sector more than doubled to a record USD 41.8 billion during the first half of 2022 from USD 19.2 billion recorded in the second half of 2021, according to the latest edition of KPMG’s Pulse of Fintech. In many parts of the region, especially outside Chinathe legacy infrastructure underpinning existing financial markets is driving a significant amount of investment towards financial market infrastructure innovation and into the digital last mile of transactions, finds the 2022 1H edition of Pulse of Fintech.
Andrew HuangPartner and Fintech leader, KPMG China says: “As we look into 2022 2H, regulators in the region continue to focus on making changes to the industry to support open banking and decentralized finance in an orderly and secure manner. Investors are taking a more focused approach to their investments, prioritizing investments in companies with very strong business models and distinctive value propositions Increasing focus on B2B solutions and technological enablement of traditional players is expected, rather than stand-alone fintech plays, especially in China.”
IN China, digital transformation continues to be a significant government priority. During 2022 1H, The People’s Bank of China released its Fintech Development Plan (2022-2025), which emphasized the commitment to appropriate regulation, privacy and data protection, low-carbon and green fintech, and fair and inclusive financial services.
Fintech investment in China remained limited in 2022 1H. The biggest fintech deal in the country in the first six months of this year was 140 million dollars raised by corporate expense management company Fenbeitong. Interest in the sector also dampened as many companies focused on infrastructure plays and partnerships with traditional financial institutions. However, insurtechs continued to draw interest.
Barnaby RobsonPartner, Deal Advisory, KPMG Chinasays: “There were a couple of very large M&A deals in the business Asia-Pacific region during the first half of 2022, including Block’s mega acquisition of Afterpay and the merger of Superhero and Swiftx. Given the increasing pressure on valuations, we may see more M&A activity in 2H 2022 as companies look for good opportunities to buy out their competitors in less mature markets and start-ups look to consolidate to gain market share and improve profitability.”
While investment in areas that saw significant interest during the height of the COVID-19 pandemic has lost some appeal, areas aligned with rapidly evolving global issues – including rising inflation, rising interest rates, geopolitical uncertainty and supply chain issues – have continued to see investment.
Key areas that received attention from investors i Asia-Pacific region during 2022 included 1H supply chain management, cyber security and privacy, identity management and governance and compliance. Open data also saw solid investments in H1’22.
IN Asia-Pacific region, the huge interest and hype seen over the past 12 to 24 months for companies operating in a few fintech sub-sectors, such as retail payments, insurtech and B2C solutions, has largely dissipated during 2022 1H.
Link to the full report:
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