Global investment in FinTech reached a seven-year low of $95 billion in 2024, down by $18.7 billion compared to the previous year, according to figures from KPMG.

The Americas saw the largest share of global investment, attracting $63.8 billion across 2,267 deals. This included $50.7 billion across 1,836 deals in the US.

Over the 12-month period, payments continued to account for the largest share of funding among the FinTech subsectors, with global investment in the payments space hitting $31 billion in 2024, up from $17.2 billion in 2023.

While UK FinTech investment fell by over a quarter last year, it still attracted more funding than those in France, Germany, China, India, Brazil and Canada combined.

But investment levels hit a “four-year low” in 2024, dropping 27 per cent from $13.6 billion in the previous year to $9.9 billion.

In the wider EMEA region, total FinTech investment fell to an eight-year low, down from $27.6 billion in 2023 to $20.3 billion.

The largest FinTech deal in Europe last year was the $560 million sale of online bank, Knab, to Austrian financial firm Bawag Group.

The biggest in the UK was the $267 million venture funding round by money transfer provider Zepz.

KPMG said that geopolitical uncertainty, high levels of inflation and the higher interest rate environment have contributed to lower levels of UK FinTech investment compared to record highs in 2021.

“2024 was another tough year for FinTech investment, which inevitably has led to some business failure and some consolidation," said Hannah Dobson, partner and UK head of FinTech, KPMG UK. "It has also sharpened the focus on a path to profit and cost control which positively leads to more sustainable saleable businesses in the longer term."

She added that in EMEA, and particularly the UK, there are some signs of a slow recovery in deals as the reduction in interest rates and more political stability leads to better certainty.

Regulatory factors are also an ongoing challenge for FinTechs in the EMEA region as they face new EU and UK standards in areas like AI, BNPL, and operational resilience.

Dobson said that KPMG expects UK investment to remain "relatively soft" in the first six months of the year, with numbers likely to pick up in the third or fourth quarter as interest rates reduce further.

“While global FinTech funding dipped in 2024, it’s encouraging to see bright spots in some areas of investment," said Karim Haji, global and UK head of financial services at KPMG. "Payments continued to be the rockstar of the FinTech subsectors, driven by late-stage deals and an increasing focus on consolidation, and RegTech gained a lot of traction.

"We are starting to see more deals coming through because of interest rate cuts in different jurisdictions and the lower cost of funding. However, we will have to wait and see if the changing world trading conditions impact inflation, interest rates and consequently these positive signs of market change”

---