Rising crypto and blockchain interest lead to overall fintech investment of $210 billion: Report

Blockchain and crypto attracted a record $30.2 billion in investment in the fintech space, leading to a total fintech investment of $210 billion according to a KPMG report. Investment in blockchain and crypto space rose from $5.5 billion in 2020 to $30.2 billion in 2021 and more than three times the previous record of $8.2 billion seen in 2018.  

The cumulative global fintech funding across M&A, PE and VC reached $210 billion across a record 5,684 deals in 2021.   

India is once again strong on the global rankings with four out of top 10 fintech deals springing up from India, in the Asia-pacific region.

“With 4 out of top 10 fintech deals in ASPAC originating from India demonstrates India’s increasing influencer in the fintech space. Advent of Digital Rupee will make this space more interesting as newer models evolve around Neobanks, Wealthtech and Insuretech. Will Digital Banks with solutions leveraging around Blockchain be the next in direction of future fintech models?” said Sanjay Doshi, Partner and Head, Financial Services Advisory, KPMG in India.

Cybersecurity ($4.85 billion) and Wealthtech ($1.62 billion) also witnessed record-levels of investment.

Also read: Digital rupee will be the first and only digital currency in the country': DEA secretary Ajay Seth

A continued surge in interest in areas like ‘buy now, pay later’, embedded banking, and open banking aligned solutions has facilitated in keeping the payments space very robust, said the report.

Cross-border fintech M&A deal value more than tripled year-over-year to $36.2 billion. Total fintech-focused M&A deal value rose from $76 billion in 2020 to $83.1 billion in 2021.

“PE funding to fintechs more than doubled from its previous high – with $12.2 billion in investment in 2021 compared to a peak of $5.2 billion in 2018,” the report pointed out.

VC investment in fintech globally more than doubled YoY from $46 billion in 2020 to a record $115 billion investment in 2021, it said.

According to the report, there is also expected to be growing interest in fintech-focused ESG solutions and banking replacements able to address the need for modernisation of core banking platforms. There will also be an increasing number of fintechs looking brand themselves as data companies rather than simply fintechs.