Recently released by KPMG Fintech pulse According to the H2’21 annual report, investment in fintech companies in Europe, the Middle East and Africa (EMEA) reached $ 77.4 billion with 1859 transactions. Reported twice a year, total global fintech financing for M & A (M & A), PE (private equity) and VC (venture capital) totaled $ 210 billion in a record 5,684 transactions in 2021. Has been reached.
The report highlights that the FinTech ecosystem in the Middle East is also evolving, with Bahrain-based Rain raising $ 75 million and UAE-based Tabby raising $ 50 million in late 2021. .. PE and M & A activities grew significantly in 2021, and the UAE continued to foster an environment that encourages and celebrates FinTech innovation.
Goncalo Traquina, Head of Management Consulting at KPMG Lower Gulf, said: “The UAE government has promoted many initiatives to drive FinTech growth. Cryptocurrencies and blockchains are moving as more and more crypto companies seek regulatory guidance to grow and develop their sectors. It is expected to remain attractive to investors in 2022. Much of the fintech investment in the UAE is focused on the areas of digital banking and payments, but AI and machine learning to improve credit risk assessment. With the introduction, lending is expected to grow. “
DIFC’s Innovation Hub has allocated approximately $ 100 million to help startups grow through the FinTech Fund Accelerator Program. In October 2021, the UAE’s Central Bank signed an agreement with the Dubai International Financial Center at the Dubai International Exposition to strengthen collaboration under the Joint Sandbox Program for FinTech. Combined with startup funding, these can be a significant part of the long-term development of the UAE’s fintech ecosystem.
Payments continued to attract the most funding in the FinTech subsector, accounting for $ 51.7 billion in global investment in 2021, up from $ 29.1 billion in 2020, according to the report’s findings. ‘, Embedded banking, and open banking-enabled solutions helped keep payment spaces very robust.
The report reveals that blockchain and cryptocurrencies are also “hot” sectors, raising a record $ 30.2 billion investment. That’s more than three times the previous record of $ 8.2 billion in 2018, from $ 5.5 billion in 2020. Cybersecurity ($ 4.85 billion) and Wealtheck ($ 1.62 billion) also saw record-breaking investments.
The largest fintech transactions in the second half of 2021 include the acquisition of S $ 9.2 billion of Danish-based PayPal processor Nets by Italy-based Nexi and 3.75 billion of fintech cloud platform companies Calypso Technology and regtech Axiom SL. Includes the establishment of Adenza in the United States through the merger of dollars. PayPal’s acquisition of Japan-based Paidy for $ 2.7 billion.
According to the report, FinTech trends to be noted in EMEA in 2022 include:
- Increased investment in decentralized finance (DeFi) and strong push for the development of a common regulatory framework for cryptocurrencies
- FinTech seeking to expand its footprint throughout the EU and beyond
- Expanding FinTech Transaction Scale in the Middle East and Africa – Mainly in the Payment Area
- Increasing interest in B2B fintech solutions and business models
- IPO opportunities are gaining increasing attention as mature FinTech investors seek to withdraw