Pulse of Fintech 1H21 - KPMG

Pulse of Fintech
H1’21
August 2021
home.kpmg/fintechpulse
Reaching new heights
2021 has seen an incredibly strong start to the year for — corporates embracing M&A as a means to attain
KPMG Fintech professionals include
the global fintech market. As you’ll see from this edition of important capabilities, broaden customer offerings, partners and staff in over 50 fintech hubs
Pulse of Fintech, the rebound we saw in H2’20 continued and grow and scale around the world, working closely with
into H1’21, with very robust investment across VC, PE, financial institutions, digital banks and
and venture capital. We saw growing deal sizes in a wide — fintechs and large tech companies embracing platform fintech companies to help them
and ‘super app’ models. understand the signals of change, identify
variety of fintech subsectors — from wealthtech and the growth opportunities and develop and
regtech to crypto and cybersecurity. If there was a word execute their strategic plans.
As vaccination levels rise around the world and
that could be used to describe H1’21, it would be:
jurisdictions continue to emerge from the pandemic,
diversity. Consider some of the key trends we’ve seen Ian Pollari
fintechs and incumbent financial institutions need to
so far this year: Global Co-Leader of Fintech,
recognize how far they’ve come and look at how they can Partner and National Sector Leader,
— growing recognition that the consumers’ digital keep building their momentum as they look to the future. Banking,
KPMG Australia
behaviors that accelerated due to the global pandemic
Whether you’re the CEO of a large financial institution or
are here to stay
the founder of an emerging fintech, the road ahead is Anton Ruddenklau
sure to be radically different from what you envisioned Global Co-Leader of Fintech,
— increasing interest and larger deal sizes in a broad Partner and Head of Financial
range of fintech subsectors, including wealthtech and just a year or 2 ago — and that’s likely a good thing. As Services Advisory,
regtech you read this edition of Pulse of Fintech, ask yourself: KPMG in Singapore
Recognizing how far we’ve come over the last 18
— growing interest in SPAC mergers, particularly in the months, what can we do now to make sure we keep
US (e.g., SoFi, Clover Health, Payoneer, Metromile) moving forward successfully? All currency amounts are in US$ unless otherwise
specified. Data provided by PitchBook unless
otherwise specified.
— rising interest in cryptocurrencies and blockchain —
not only from startups and investors, but also from
governments and regulators
#fintechpulse
©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
2
Contents
Global Fintech
insights segments
— Global fintech — Payments
investment — Insurtech
analysis — Regtech
04 13
(VC, PE, M&A)
— Wealthtech
— Top 10 deals
— Fintech trends in — Blockchain/cryptocurrency
2021 — Cybersecurity
Regional
Featured analysis
interview
— Jason Pau,
Ant Group 26 29 32 — Americas
— EMEA
— ASPAC
Spotlight article
— Putting data at the heart of ESG
decision-making
Global insights Fintech segments | Featured interview | Spotlight article | Regional insights
Global fintech investments in H1 2021 recorded
$98B with 2,456 deals
#fintechpulse
4
Global insights
Global fintech investment reaches $98 billion at mid-year
“
Fintech investment continues to bounce back Record-setting corporate VC volume helping drive
Global investment in fintech
Global fintech investment continued its remarkable rebound in fintech surge has seen a quick V-shaped
H1’21, rising from $87 billion in H2’20 to $98 billion in H1’21. There was $21 billion in corporate-affiliated VC investment in recovery from 2020 levels.
Fintech deal volume hit a new record of 2,456 during H1’21. H1’21. CVC deal volume reached a high of 284 in Q1’21 and then Growing deal sizes, valuations
A wealth of dry powder, COVID-related digital acceleration, an grew further to 312 in Q2’21. Corporates around the world are and successful exits for
increasingly diverse range of fintech hubs and subsectors, and under pressure to increase the velocity of their digital proven players and proven
robust activity in almost all regions of the world contributed to the transformation activities and to enhance their digital capabilities. thematics have driven this
strong start to 2021. Over the last year, many have seen that it’s quicker to do so by result. Corporates are also
partnering with, investing in or acquiring fintechs, particularly with increasingly looking to seize
Global VC investment of over $52 billion close to
respect to high demand skills. new market opportunities or
surpassing previous annual record
urgently address gaps by
Global VC investment reached over $52 billion in H1’21 — very With $42.1 billion of investment, the US accounts for
embracing partnering and
close to the annual record of $54 billion seen in 2018. The largest nearly half of global total
M&A to achieve their strategic
”
VC rounds of H1’21 included US-based Wealthtech Robinhood The Americas accounted for $51.4 billion of fintech investment in objectives.
($3.4 billion), Brazil-based digital Nubank ($1.5 billion), Sweden- H1’21, with the US accounting for $42.1 billion. Investment in the
based ‘buy now, pay later’ firm Klarna (two rounds totaling $1.9 EMEA region was also very robust at $39.1 billion. In the Asia-Pacific Ian Pollari
billion), and Germany-based wealthtech Trade Republic ($900 Global Fintech Co-Leader,
region, fintech investment rose considerably between H2’20 and Partner, National Banking Leader,
million). South Korea-based mobile financial app Toss raised $410 H1’21 — rising from $4.5 billion to $7.5 billion, although investment KPMG Australia
million in Asia’s largest VC round of H1’21. remained suppressed compared to previous record highs.
#fintechpulse
#fintechpulse
5
5
Global insights
“
PE firms invest $5 billion in fintech in H1’21 Gojek announced a merger with marketplace Tokopedia — in part to Cryptocurrency and
better compete with super apps such as Grab1 and mitigate any blockchain is exploding
PE firms embraced the fintech space in H1’21, contributing $5
competitive threat from SEA Limited. globally. There’s so much
billion in investment to fintech — surpassing the previous annual
high of $4.7 billion seen in 2018. The largest PE deals were quite happening in the space right
Big tech partnerships backing big fintech plays
substantial, including the $800 million buyout of InvestCloud by now, between the eCNY
Big techs have continued to move into the banking space to create project running in China,
Motive Partners and Clearlake Capital, Silverlake’s $800 million
an extended experience for their customers or to remove friction Facebook’s Diem, a number
investment in Abu Dhabi-based Group 42 and the $600 million
points in processes — primarily by forging partnerships with of ecosystem initiatives —
buyout of Ireland-based Fenergo by Astorg and Bridgepoint.
existing banks. Most recently, Google announced partnerships with not to mention all the
Cross-border M&A more than doubles next to all of 2020 a number of banks and credit unions, including Citi, BBVA, Bank of different trading platforms
Cross-border M&A deal value rose dramatically — from $10.3 Montreal, Stanford FCU and others in order to provide Google Plex raising money. Digital
billion in all of 2020 to $27.7 billion in H1’21 alone. Following a digital bank accounts integrated with Google Pay.2 currencies and virtual assets
pandemic-driven slowdown in cross-border M&A, many are a big, big topic of
Trends to watch for in H2’21
incumbents and mature fintechs embraced cross-border M&A as a conversation. I think for the
means to gain critical mass at a regional or global level or to — growing consolidation, particularly in mature areas of fintech as rest of this year at least,
expand services and capabilities. In H1’21, for example, the fintechs look to become the dominant market player either crypto will be a very hot ticket
”
London Stock Exchange Group acquired data analytics firm regionally or globally. for investors.
Refinitiv for $14.8 billion, while Nasdaq acquired Canadian cloud- — more interest in revenue-based financing solutions, banking-as-
based fraud detection platform Verafin for $2.7 billion. Anton Ruddenklau
a-service models, and B2B services. Global Fintech Co-Leader,
Partner and Head of Financial Services
Platform models and ‘super apps’ gain precedence — increasing regulatory scrutiny, particularly around Advisory,
cryptocurrencies and virtual assets. KPMG in Singapore
Large fintechs and platform companies have focused on building up
their platform or ‘super app’ models, including embracing solutions — stronger focus on cybersecurity and areas like digital identity to
such as embedded finance in order to provide a stronger ecosystem support other fintech offerings.
of services. This is particularly true in Southeast Asia; in H1’21,
1 https://www.cnbc.com/2020/10/09/central-banks-lay-out-a-framework-for-digital-currencies.html
#fintechpulse
6
Global insights
Top fintech trends for 2021

During the first half of 2021, we saw interest in fintech grow to a fever pitch in most regions of the world. As we head into the second
half of the year, this extraordinary momentum is expected to continue. Here are KPMG’s top predictions for fintech in H2’21.
1. 4.
Crypto will be a hot focus for investors Cybersecurity will likely gain even greater prominence
H1’21 saw an explosion of activity in the blockchain and crypto Given the rise in digital transactions and the subsequent rise in
space. We’ll likely see this trend continue, with focus stretching cyberattacks and ransomware, cybersecurity is a focus area for
across the crypto ecosystem — from cryptocurrencies and trading investors, particularly corporates. In addition to threat security,
platforms to NFTs, alternative asset trading, and support structures. fraud management, KYC, and passwordless security will gain
The space will also see a more diverse range of investors increasing attention from investors.
considering investments in the space.
5.
B2B services will gain attention across fintech
2.
M&A activity will continue to surge subsectors
M&A activity will likely grow considerably as corporates look to We’ll likely see B2B services such as banking-as-a-service, gain
expand their capabilities and offerings and fintechs look to scale. even more ground on the investor radar — not only in the
Cross-border activity will likely also be robust as fintechs look to payments space, but also in areas like insurtech, wealthtech, and
become global or regional leaders. This could also drive the return of regtech. We expect to see embedded finance continue to gain
major mega M&A transactions. traction as organizations strive to integrate financial services with
other environments.
3. SPACs could steal the spotlight

While IPO exit activity is expected to be strong in H2’21, we could
see SPAC mergers stealing the limelight in H2’21 — particularly if
Grab’s $40 billion SPAC merger goes ahead. We will likely also see
a proliferation of US SPACs looking to EMEA and the Asia-Pacific
6.
Partnerships will be embraced by big techs and fintechs
Partnership models will be a critical means for companies looking
to expand their service offerings. We’ll likely see partnerships
emerging across the fintech sector — from wealthtech to
region for targets. insurtech — and involving a range of participants from the big
techs and platform players to financial institutions and larger
fintechs looking to add to their core services.
#fintechpulse
7
Global insights
After an unexpectedly strong 2020, the first half of 2021 sees massive rebound
Total global investment activity (VC, PE and M&A) in fintech Global ventureGlobal
activityventure
in fintech
activity in fintech
2018–2021* 2018 – 2021* 2018–2021*
$250 5,000 $60 3,187 3,121 3,500
3,985 3,794 2,932 3,000
$50
$200 3,520 4,000
2,500
$40
$150 3,000 2,040 2,000
2,456 $30
$100 2,000 1,500
$20
1,000
$50 1,000 $10 500
$147.9 $215.4 $121.5 $98.0 $53.7 $41.4 $44.4 $52.3
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
Deal value ($B) Deal count Deal value ($B) Deal count
Global M&A activity in fintech Global PE growth activity in fintech

2018–2021* 2018–2021*
$200 800 $6 120
694 104 104
700
$5 100
$150 569 502 600 86
$4 80
500
$100 400 $3 63 60
353
300
$2 40
$50 200
$1 20
$89.6 $170.8 $74.1 100 $4.7 $3.1 $3.0 $5.0
$40.7
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.
#fintechpulse
8
Global insights
Late-stage venture valuations more than double year-over-year

Global median pre-money valuations ($M) by stage in fintech Global cross-border M&A activity in fintech
2018–2021* 2018–2021*
$325.0 $80 250
205
183 200
$60 170
150
$40
$135.0 100 100
$74.5
$70.0 $20
$35.0 $10.3 50
$24.8
$19.7 $17.1 $51.3size ($M) in fintech
$69.7 $27.7
$5.0 $7.0 $8.0 Global median M&A
$6.0 $0 0
2018–2021*
2018 2019 2020 2021* 2018 2019 2020 2021*
Angel & seed Early VC Later VC Deal value ($B) Deal count
Global VC activity in fintech with corporate participation Global median M&A size ($M) in fintech
2018–2021* 2018–2021*
$35 1,000 $55.0
$30 782 803 $49.9
758 800
$25
596
$20 600 $38.6
$15 400 $32.5
$10
200
$5
$33.2 $21.9 $24.2 $20.8
$0 0
2018 2019 2020 2021*
Deal value ($B) Deal count 2018 2019 2020 2021*
#fintechpulse
9
Global insights
Q2 dip belies the massive push into fintech funding

Total global investment activity (VC, PE and M&A) in fintech Global M&A activity in fintech
2018–2021* 2018–2021*
$160 1,400 $160 250

1,275
$140 1,200 $140
1,181 206
1,124 200
194
$120 1,031 $120
954 1,000 179
973 941 937
934 934
$100 932 890 $100 159 159
855 150 149 159 150
794 800 145
139
$80 130
$80 122
122
600 105
100
$60 $60
400
$40 $40
$17.3
50
$12.6
$13.5
$12.3
$12.4
200
$11.1
$20 $20
$8.3
$7.9
$144.7
$133.5
$2.4
$37.1
$35.7
$29.8
$45.3
$27.0
$26.3
$21.8
$23.7
$63.5
$50.7
$47.3
$23.5
$20.4
$33.3
$50.9
$27.2
$18.4
$0 0 $0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2018 2019 2020 2021 2018 2019 2020 2021
#fintechpulse
10
Global insights
Momentum carries over between quarters for record first half

Global venture activity in fintech Global VC activity in fintech with corporate participation
2018–2021* 2018–2021*
$35 1,200 $20 350
1,052 312
$18
988 300
$30
1,000 284
$16
881 250
$25 853 $14 236
775
783 766 786 762 800
762 223
748 $12
740 711 206 200
$20 673 196 197
179 184 195
600 $10 186 188
177 176
$15 150
$8
400
$10
$6 100
$4
200
$5 50
$2
$17.4
$10.1
$11.9
$13.0
$21.9
$10.0
$14.6
$12.5
$10.8
$11.7
$22.4
$29.9
$7.8
$3.4
$4.6
$3.3
$3.9
$4.6
$7.9
$5.3
$5.6
$5.5
$8.9
$8.9
$9.9
$7.9
$8.9
$9.4
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
Deal value ($B) Deal count Angel & seed Early VC Later VC Deal value ($B) Deal count
#fintechpulse
11
Global insights
Top 10Top 10 global fintech deals in H1 2021

global fintech deals in 2020
1. Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A

2. Robinhood — $3.4B, Menlo Park, US — Wealth/investment management —
4 Series G
8
9
3 1 3. Verafin — $2.75B, St. John’s, Canada — Institutional/B2B — M&A
6 5
10 4. Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A
2
5. Divvy — $2.5B, Draper, US — Payments/transactions — M&A
6. SoFi — $2.4B, San Francisco, US — Lending — Reverse merger
7
7. Nubank — $1.5B, Sao Paulo, Brazil — Banking — Series G
8. Paysafe Group — $1.45B, London, UK — Payments/transactions — Reverse
merger
9. Acima Credit — $1.4B, Sandy, US — Lending — M&A
10. BTC.com — $1.3B, Los Angeles, US — Blockchain/cryptocurrency — M&A
Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.
#fintechpulse
12
Global insights Fintech segments Featured interview | Spotlight article | Regional insights
Fintech segments
— Payments
— Insurtech
— Regtech
— Wealthtech
— Blockchain/cyrptocurrency
— Cybersecurity
#fintechpulse
13
Fintech — Payments
Payments sector keeps top spot for fintech investment globally
Total global investment activity (VC, PE and M&A) in payments After a strong 2020, global investment in payments kept up the momentum in the
2018–2021* first half of 2021, led by the $2.4 billion SPAC merger by US-based SoFi, the
$120 600 $1.4 billion SPAC merger of UK-base Paysafe Group, two VC funding rounds
totalling over $1.9 billion by Sweden-based Klarna and two funding rounds
totalling over $1.1 billion by Brazil-based Nubank. The growth of e-commerce
490
$100 471 500 and contactless payments during the pandemic, partly driven by more connected
454 consumers, has created a perfect storm for fintech investors. Key H1’21
highlights from the payments sector include:
$80 400
Open banking fueling payments investments in EMEA
327 Open banking regulations have helped accelerate fintech adoption in the EMEA
$60 300
region, improving third-party access to data and fostering an environment of
collaboration — particularly in areas such as embedded finance.
$40 200 Embedded finance diversifying payments space
The payments space is diversifying beyond person-to-person and bill payments,

with solutions increasingly embedded into offerings, retail apps and ecosystem
$20 100
platforms. Disbursements is an emerging area being looked at both by insurers
for claims processing and by governments as part of disaster recovery.
$49.9 $113.3 $27.8 $19.0
$0 0 Payments-focused M&A strengthens
2018 2019 2020 2021*
Deal value ($B) Deal count M&A activity continued to build during H1’21, although there were no mega M&A
deals to be seen. There continues to be a lot of opportunities for strategic
acquisitions and for companies looking to expand market share, which bodes
well for M&A heading into H2’21.
#fintechpulse
14
Fintech — Payments
“
Increasing involvement of non-financial companies What to watch for in H2’21
We’ve seen some great
Many non-financial companies are broadening their reach into — European challenger banks partnering with US banks to examples of embedded
payments and financial services. During H1’21, IKEA bought a piggyback on existing bank charters finance so far in 2021, with
stake in Ikano bank to provide consumer banking services,2 traditional retailers
— increasing number of challenger banks focusing on customer
Walmart announced a partnership with Ribbit Capital to create partnering with financial
niches, including minority communities, unbanked populations,
a fintech to offer digital financial products3, and Walgreens institutions to embed deposit
LGBTQ2 customers, or high net-worth individuals
announced a partnership with MetaBank to offer bank accounts products or to provide
in-store and online — including the use of a Banking-as-a- — continued proliferation of ‘buy now, pay later’ offerings and
holistic and complimentary
Service platform by InComm Payments and debit cards issued ‘pay by bank’ services
offerings to their core
by Mastercard.4 — strengthening focus on B2B payments solutions and services, customer base. This trend
like digitized AR/AP will continue to grow, fueled
by e-commerce, open
”
— increasing interest in IPOs — both traditional and through
SPAC mergers. banking, and APIs.
Chris Hadorn
Global Leader of Payments,
Principal, Financial Services,
KPMG in the US
2 https://www.fintechfutures.com/2021/02/ikea-buys-49-stake-in-financial-services-partner-ikano-bank/
3 https://corporate.walmart.com/newsroom/2021/01/11/walmart-announces-creation-of-new-fintech-startup
4 https://www.bankingdive.com/news/walgreens-to-launch-digital-bank-accounts-this-year/597645/
#fintechpulse
15
15
Fintech — Insurtech
Deal size and diversity driving global insurtech investment
Total global investment activity (VC, PE and M&A) in insurtech After a strong H2’20, insurtech investment remained solid in Q1’21, including the $828 million SPAC
2018–2021* merger of Clover Health in the US, the $818 million acquisition of GoCo Group in the UK by Future
$35 500 PLC,5 and a $650 million raise by Germany-based WeFox. VC funding was particularly strong in the
458 insurtech space, driven by the continued maturation of startups and increasing valuations. Key Q1’21
450 highlights from the insurtech space include:
440
$30
400 Valuations up as insurtechs exit successfully
$25 350 The positive public market activity from insurtechs, both from IPOs and SPAC mergers, has driven
329 interest in the space up along with valuations. In H1’21, Oscar Health raised $1.2 billion in a traditional
300 IPO, while Metromile, Clover Health and GoCo group all held SPAC mergers. Several other insurtechs
$20
also announced SPAC mergers, including Hippo Insurance and Doma.
250
$15 Different regions seeing insurtech funding grow

197 200
While the US continued to attract the lion’s share of insurtech investment, other jurisdictions also
150 attracted large rounds in H1’21, including Germany (WeFox), France (Alan and Active Assurances),
$10
and India (PolicyBazaar). As insurtechs mature and attract bigger funding rounds in all regions,
100 investors are seeing the benefits being realized by users — making the sector even more attractive.
$5
50 Enabling technologies attracting bigger funding rounds
$29.1 $14.1 $16.5 $7.1 Insurtech carriers have attracted the most attention from investors historically, however, technology
$0 0
2018 2019 2020 2021* enablers are growing on the radar of investors. During H1’21, a number of insurtechs focused on
enablement for the insurance industry raised good funding rounds at high valuations, including Shift
Deal value ($B) Deal count
Technology, Embroker, Tractable and Collective Health.
Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as 5 https://www.futureplc.com/2021/02/22/future-plc-acquires-goco-group-plc/
of 30 June 2021.
#fintechpulse
16
Fintech — Insurtech
“
Corporates making acquisitions What to watch for in H2’21
Over the last few years, the
In the US, we’re seeing more corporates making outright — partnerships focused on providing on-demand insurance really large insurtech deals
acquisitions in order to gain capabilities — a trend predicted products were almost exclusively
a few years ago that is only coming to fruition now. During
”
— increasing investments targeting the supplemental benefits insurtech carriers. While we
H1’21, American Family bought commercial insurance saw plenty of those deals
space
distributor Bold Penguin and6 USAA announced its purchase happening in H1’21,
of usage-based insurance provider Noblr.7 — continued focus on embedded insurance
including Next Insurance,
— technologies focused on enabling agents and brokers Clear Cover and Bought by
Big techs partnering to provide insurance offerings
— vertical integration from insurtechs. Many, we also started to see
Big techs continued to focus on forging partnerships to larger deals in the enabling
embed insurtech offerings into their offerings and platforms. tech space, including Shift
In H1’21, Google announced a partnership with Munich Re Technology — which is
and Alliance to provide cyber insurance to Google Cloud focused on process
customers. enablement, and Collective
Health — which is a self
insurance technology
”
platform for businesses.
Pat Kneeland
Manager,
KPMG Innovation Lab
KPMG in the US
6 https://www.dig-in.com/news/american-family-acquires-bold-penguin#:~:text=American%20Family%20Insurance%27s%20holding%20company%20has%20acquired%20the,founder%20Ilya%20Bodner%20will%20remain%20with%20the%20company.
7 https://communities.usaa.com/t5/Press-Releases/USAA-Announces-Plans-to-Acquire-Insurtech-Company-Noblr-Inc/ba-p/249768
#fintechpulse
17
Fintech — Regtech
Surging interest sees regtech investment hit record annual high at mid-year
Total global investment activity (VC, PE and M&A) in regtech Investment in regtech surged in H1’21, particularly in the Americas and Europe where
2018–2021*
$12 250
the regtech space is maturing at a rapid pace. The constant evolution of regulatory
amendments and implementations, combined with the drive to reduce compliance
217 costs, is helping drive interest and investment in regtech. Q1’21 highlights from the
211
$10 201 regtech space include:
200
COVID-19 accelerating regtech investment
$8 A growing number of digital customers and transactions, in addition the opening of
new channels for criminals to potentially exploit, has made it challenging for
150
142 companies to stay on top of fraud and compliance requirements. This has driven a
$6 major increase in demand for regtech solutions able to identify and address incidents
accurately.
100
$4 Cryptocurrency-focused regtech big winner in H1’21
With the values of some cryptocurrencies taking off, more and more investors are
focusing on cryptocurrency trading. With this increased interest comes rising demand
50
$2 for safe and secure access to investments. This has led to a major uptick in regtechs
focusing on the crypto space. In H1’21, Bullish Capital has also raised a significant
$8.0 $3.5 $10.4 $6.6
amount to develop a blockchain-based cryptocurrency exchange platform that blends
$0 0 the performance, user privacy and compliance benefits of central order book
2018 2019 2020 2021*
technology with the user benefits of decentralized finance.8
8 https://b1.com/news/launch-of-bullish-global//
#fintechpulse
18
Fintech — Regtech
“
AML, KYC and fraud protection remain hot areas of investment Regulators in Asia focusing on regtech
The evolving environment of
Anti-money laundering, fraud protection, and know-your-customer While regtech investments in Asia lag behind other regions,
business and new digital
solutions attracted major attention from investors in H1’21, evidenced regulators in the ASPAC region continue to support regtech
innovations are forcing banks
by the $2.7 billion acquisition of Canadian fraud detection platform advancements. In H1’21, the Monetary Authority of Singapore
and financial institutions to
Verafin by Nasdaq, Mastercard’s acquisition of Ekata for $850 million, announced a $32 million fund to help regtech startups bring
embrace the transformation to
and the $600 million buyout of Ireland-based Fenergo by France and POCs to market.10 Following on its development of a regtech
stay competitive. The massive
UK-based PE firms Astorg and Bridgepoint.9 This space is expected to adoption roadmap in H2’20, the Hong Kong Monetary
migration during the pandemic
remain a critical sector of investment for the foreseeable future. Authority launched a Regtech Adoption Practical Guide
to virtually accessing financial
Series in H1’21 to provide practical guidance for implementing
Regtech markets maturing, led by US and UK services amplifies the risks we
regtech solutions.11
were already facing (for
The US and UK continued to be front-runners in the regtech space, with
What to watch for in H2’21 example, fraud incidents have
a number of companies in both countries attracting $100 million+ VC
exploded due to new users on
funding rounds, including US-based Bullish, Carta, Deel, and
— strengthening focus on cryptocurrency-focused regtech digital channels) and RegTech
Chainalysis and UK-based Rapyd and ComplyAdvantage.
is promising the ability to
— increasing investment from corporates looking to better
quickly harness the power of
manage their regulatory compliance
technology and to positively
— growing maturity of regtech firms in different regions transform risk management
and regulatory compliance
— increasing M&A activity, particularly in the Americas and
”
processes.
Europe.
Fabiano Gobbo
Global Head of Regtech,
Partner, Risk Consulting,
KPMG in Italy
9 https://www.fenergo.com/press-releases/astorg-and-bridgepoint-acquire-financial-software-company-fenergo/
10 https://www.mas.gov.sg/news/media-releases/2021/mas-commits-42m-to-spur-adoption-of-technology-solutions
11 https://www.hkma.gov.hk/eng/news-and-media/press-releases/2021/06/20210617-5/
#fintechpulse
19
Fintech — Cybersecurity
Cybersecurity investment on a record pace

Total global investment activity (VC, PE and M&A) in fintech: cybersecurity Total investment in cybersecurity grew dramatically in H1’21, driven by Nasdaq’s $2.7
2018–2021* billion acquisition of Canadian anti-financial crime management solution provider Verafin.
$4.0 70 VC funding in the space was also very strong in H1’21, led by a $543 million Series A
raise by Transmit Security, in what was described as the largest cybersecurity Series A
$3.5 61 60 deal in history.12 Key Q1’21 highlights from the cybersecurity space include:
$3.0 53 Big start to the year for cybersecurity investment

50
Cybersecurity is on pace to see a record level of annual investment by the end of 2021,
$2.5 44
40
driven by growing M&A in the space, including the $2.7 billion acquisition of Verafin. H1’21
$2.0
also saw a number of announced acquisitions, including Paypal’s acquisition of digital
asset security provider Curv.13
30
$1.5
22
Increasing focus on automation and incident response
20
$1.0 Given the rise of ransomware and other cyber attacks, there is an increasing focus on the
ability of companies to quickly detect malicious attackers. This is driving significant
10
$0.5 investment in the AI space and also driving cybersecurity companies to refocus their
$0.5 $0.9 $2.2 $3.7 efforts. In H1’21, IT security company FireEye announced the $1.2 billion sale of its IT
$0.0 0 security business and name to Symphony Technology Group, keeping only its digital
2018 2019 2020 2021*
forensics and incident response offerings under the Mandiant brand — which it initially
acquired in 2013.14
12 https://www.forbes.com/sites/rashishrivastava/2021/06/22/transmit-security-raises-543-million-the-largest-series-a-funding-round-in-cybersecurity-history/?sh=1ef575ab3d7a
13 https://newsroom.paypal-corp.com/2021-03-08-PayPal-to-Acquire-Curv#:~:text=SAN%20JOSE%2C%20Calif.%2C%20March%208%2C%202021%20%2F%20PRNewswire,digital%20asset%20security% 20based%20in%20Tel%20Aviv%2C%20Israel.
14 https://marketresearchtelecast.com/fireeye-is-selling-portions-of-the-business-for-1-2-billion/62492/
#fintechpulse
20
Fintech — Cybersecurity
“
Growing comfort with cloud-based platforms driving What to watch for in H2’21
Given the significant increase
cloud-based security investment
— strengthening M&A and investment focused on machine in digital transformation across
Over the last 18 months, companies have become a lot more enterprises, along with recent
learning and automation for cybersecurity
comfortable with relying on cloud-based platforms than they have high-profile ransomware
been in the past. This uptick in interest and use of cloud-based — enhanced focus on managing and responding to
attacks, it's not surprising that
technologies is now driving investment in the final piece of the ransomware attacks
AI and machine learning
cloud puzzle: cloud-based security platforms. Investments in — increasing investment in digital customer behavior analysis focused threat detection and
cloud-based security are two-fold, VC investments in and fraud identification. fraud solutions are getting a
cybersecurity firms that have solved specific problems and lot of attention — from both
acquisitions of niche cybersecurity firms by large cloud-based corporations and investors. In
platforms looking to broaden the scope of their offerings. addition to these critical
investment areas, we’re also
seeing interest in consumer
identity and access
management solutions that
are shifting quickly toward
password-less security
”
solutions.
Charles Jacco
Americas Cyber Security Services,
Financial services Leader,
Principal,
KPMG in the US
#fintechpulse
21
Fintech — Wealthtech
Wealthtech a big hit with VC investors in H1’21

Total global investment activity (VC, PE and M&A) in wealthtech Global investment in wealthtech boomed in H1’21, surpassing the total investment
2018–2021* seen in 2020 and nearing the record annual high set in 2015. VC investment was
$1.6 60 particularly strong, including a $600 million raise by Canada-based Wealthsimple, a
57 $325 million raise by US-based CleanCapital, and a $300 million raise by US-based
$1.4 NYDIG. Key Q1’21 highlights from the wealthtech space include:
50
Corporates taking action on wealthtech
$1.2
42
Corporates have continued to play a key role in wealthtech investment, with a number
40
37 of well-established players making investments or acquiring wealthtechs in recent
$1.0
quarters. In H1’21, JP Morgan announced the purchase of UK-based Nutmeg,
31 pending regulatory approval.15
$0.8 30
Investment offerings maturing

$0.6
The provision of investing services has matured significantly and gained more
20
credibility in the market. Wealthsimple, Nutmeg, Moneyfarm and others have
$0.4 managed to get the cost of investing down by creating efficient ways of bulk
10 purchasing, digitally interacting with clients and completing onboarding processes.
$0.2
Robo-advisory still in its infancy
$0.7 $0.4 $0.8 $1.4
$0.0 0 The holy grail of robo-advisory — getting personalized advice through digital
2018 2019 2020 2021* means — is still in its infancy, with few investors putting faith in robot-driven advice
Deal value ($B) Deal count over human experience. The infrastructure supporting robo-advisory is maturing
(e.g., platforms, efficient processes), however, setting the stage for further
developments over time.
15 https://www.cnbc.com/2021/06/17/jpmorgan-to-buy-uk-digital-wealth-manager-nutmeg-.html
#fintechpulse
22
Fintech — Wealthtech
“
Consolidations among established wealth management What to watch for in H2’21
Many of the innovations in
players
— corporates continuing to target M&A in order to gain access to wealthtech to date have
The wealth management space in Europe, particularly in the UK, innovations been focused on
remains fragmented, making it difficult for firms to innovate. Some improving the
standalone wealth management players are now looking to — increasing consolidation among suppliers across the value
effectiveness of existing
consolidate so they have enough assets under management to chain
wealth management
support making innovative and radical changes. — diversification of asset management platforms to offer a more business models. One
diverse range of assets area where we do see
— stronger focus on truly personalizing digitalized advice with new opportunities
respect to model portfolio services. emerging relates to the
use of investment
platforms that put different
asset classes, like real
estate and other illiquid
esoteric assets such as
classic cars or wine, into
the reach of standard
”
investors.
Bill Packman
Partner and Wealth Management
Consulting Lead,
KPMG in the UK
#fintechpulse
23
Fintech — Blockchain/cryptocurrency
Investment in blockchain and crypto in H1’21 more than double all of 2020
Total global investment activity (VC, PE and M&A) in blockchain & cryptocurrency Investment in blockchain and cryptocurrencies heated up dramatically in H1’21, with
2018–2021* investment more than twice the level seen in 2020 and soaring past the previous annual
$10 1,000 record high set in 2018. Key Q2’21 highlights in the crypto and blockchain space include:
$9 887 900 Evolving nature of investors

As the blockchain and crypto sector has matured, so has the nature of its investors. In
$8 800
H1’21, a significant amount of institutional money flowed into the crypto space, highlighting
$7 700 the broadening of the investor base. Investor awareness and knowledge of the sector is
639 growing, with investors now having a much better understanding not only about crypto
580
$6 600 assets, but also the operational and procedural side of crypto — from custody and storage
548 to storekeeping and the competitiveness and maturity of service providers.
$5 500
Increasingly Hot VC market
$4 400
VC investment was very strong in the blockchain and crypto space. Numerous companies
$3 300
raised $100 million+ funding rounds, including BlockFi ($350 million), Paxos ($300 million),
Blockchain.com ($300 million) and Bitso ($250 million).
$2 200
China continuing to lead CBDC drive
$1 100 China has continued to move forward with testing of its central bank digital currency (the
$7.2 $5.0 $4.3 $8.7 ‘digital renminbi’, digital yuan, or e-CNY). In H1’21, it expanded its pilot project to include
$0 0
salary payments for some workers in China’s Xiong’an New Area,16 the payment of subway
2018 2019 2020 2021*
Deal value ($B) Deal count fares17 and the exchange of digital and physical currencies at two banks in Beijing.18 The
evolution of the digital currency combined with China’s Belt and Road Initiative could truly
Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. open up a whole new level of correspondent banking and money transfers.
16 https://www.coindesk.com/china-cbdc-wage-pilot
17 https://bitcoinist.com/after-chasing-off-bitcoin-miners-china-launches-new-test-for-digital-yuan/
18 https://www.pymnts.com/cryptocurrency/2021/china-owned-commercial-bank-allows-digital-yuan-to-cash-conversions-at-atms/
#fintechpulse
24
Fintech — Blockchain/cryptocurrency
“
Emerging focus on NFTs What to watch for in H2’21
Between its digital currency
Interest in non-fungible tokens is beginning to gain more traction, — continued maturation of the cryptocurrency space
and Belt and Road Initiative,
with interest in a whole range of new types of assets, ranging from
— stronger separation between cryptocurrencies and the use of China could create a real
professional real estate to more fragile assets which can be
blockchain technologies alternative to the supremacy
tokenized or fractionalized.
of the US dollar over time.
— further focus on regulatory frameworks, particularly in India,
Increasing regulatory attention While the digital currency
which could regulate cryptocurrencies as an asset class in
initiative is relatively small
Cryptocurrencies continued to be a critical focus for some H2’21
scale now — still in the
regulators, with widespread differences between jurisdictions as — the evolution of exchanges focused on areas such as NFTs. testing phase — it has a lot
to acceptance and use. During H1’21, China banned financial
of potential. With countries
institutions and payments companies from providing
from areas such as Africa
cryptocurrency related services,19 while El Salvador announced
and Southeast Asia signing
that Bitcoin would become legal tender in the country as of
trade agreements with China
September 7, 2021.20
and potentially accepting the
digital yuan as a mode of
clearing trade, it could gain
traction quickly. It’s going to
be a critical area to watch
”
over the next few years.
Laszlo Peter
Head of Blockchain Services,
Asia Pacific,
KPMG Australia
19 https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.
20 https://www.reuters.com/technology/bitcoin-become-legal-tender-el-salvador-sept-7-2021-06-25/ Not for distribution in the USA.
#fintechpulse
25
Global insights | Fintech segments Featured interview Spotlight article | Regional insights
Featured interview
Jason Pau
Chief of Staff, International to the
Chairman and CEO, Ant Group
#fintechpulse
26
Featured interview: Ant Group

Closing the digital skills gap: How Ant Group is supporting the next generation of global fintech talent through
the 10x1000 Tech for Inclusion program
Bridging the digital skills gap is a major challenge, not only for established companies in financial services, but also for fintech startups looking to grow and for countries looking to
establish or expand their digital economies and fintech ecosystems.
Through the 10x1000 Tech for Inclusion program, Ant Group’s digital payment platform Alipay is working in collaboration with the International Finance Corporation (IFC) and other
partners to close the skills gap by developing and fostering a global community of fintech talent that can help drive digital economic growth.
Recognizing the importance of digital skills Building a fintech community for the future
Ant Group, which is the owner and operator of Alipay, understands the critical role of 10x1000 Tech for Inclusion program activities align with key pain points for fintechs, such
digital skills and capabilities. “In the last 17 years of our journey, we realized that digital as fostering the mindset needed to adopt technologies like blockchain, AI, and cloud
skills — tech skills — are really the heart of what can drive this new era of digital growth computing to drive outcomes like inclusion and sustainability, as well as, applying
and digital innovation,” explains Jason Pau, the Chief of Staff — International to the technology to solve real business problems. Harnessing the power of the global fintech
Executive Chairman and CEO of Ant Group.
community, the program aims to establish a truly global curriculum to help learners across
Recognition of the importance of tech skills has grown considerably over the last 18 the world advance.
months. “COVID-19 has…shown the world how important digital skills [are],” he says. But
access to such skills — or the ability to develop them — is limited, particularly in less The community element can’t be overstated. “We really think the power is going to be in
mature jurisdictions and emerging economies. “I think we all need to work harder, being in the community,” Pau says. By fostering a global community of fintech practitioners and
the business of fintech…to ensure that this digital divide doesn't persist.” business leaders that help each other with business challenges and innovation, the
program will likely have an impact and reach far beyond being a platform for learning.
The 10x1000 Tech for Inclusion program
Ant Group was already working on ways to help close the digital divide before COVID-19 Creating a foundation for success
drove demand for digital tech talent through the roof globally. In 2018, Alipay, the leading In H1’21, 10x1000 Tech for Inclusion held its first full program online with 15 teams of 10
digital platform in China, established the 10x1000 Tech for Inclusion program in professionals each. As part of the program, each group was challenged to develop a
partnership with the International Finance Corporation (IFC). The program’s mission is to capstone project centered around one of three key themes: sustainability, innovation, and
enable learners to become drivers of digital economic growth. inclusion. They had to work together to identify a problem and then come up with a
“Our vision for this program is to train 1,000 emerging tech talents and tech leaders — not solution or a product that could be taken to market.
only in emerging markets, but globally — each year for the next 10 years,” Pau shares.
“Our hope is that by training this group of 1,000 each year, hopefully 10,000 over 10
years, that they will inspire hundreds of thousands and millions more.”
#fintechpulse
27
Featured interview: Ant Group
I’ll be very honest, we were absolutely surprised by the quality of the capstone
projects,” Pau says. He provides examples of the different problems that groups
tackled: How can we drive financial literacy access to youth?
How can fintech be used to develop and support carbon trading? How can fintech be
leveraged to reach the unbanked — individuals who haven’t been reached by
traditional financial services? How can we help incumbent financial institutions
leverage fintech to drive greater access?
The quality of the capstone projects and the ability of teams to work together so well
highlights the vast potential for the 10x1000 Tech for Inclusion program over the long-
term. “That really surprised us — the level of engagement between each of these
learners,” Pau explains. He highlights the sense of collaboration between program Watch the full interview as KPMG’s Global Fintech Co-Leader,
participants and their passion for learning about the latest in technology innovations Anton Ruddenklau, speaks to Jason Pau, Chief of Staff —
and how to deploy them to solve problems. “That’s something we’re really excited International to the Chairman and CEO of Ant Group about
how Ant Group are helping to close the digital skills gap in Asia:
about…It really speaks to the potential for greater collaboration.”
home.kpmg/fintechpulse
Looking to the future: What’s next for the 10x1000 program? About Ant Group
While the success of the initial training program is exciting, Pau emphasizes that Ant Group aims to create the infrastructure and platform to
10x1000 Tech for Inclusion is just getting started — and that they’re open to bringing support the digital transformation of the service industry. It
more partners on board. “What we're really hoping to build here is a global community, strives to enable all consumers and small and micro businesses
an open community,” he explains. “We're looking for partners, whether it's on to have equal access to financial and other services that are
content…in terms of recruitment or in terms of offering this platform for learners inclusive, green and sustainable.
around the world. We're also looking for strategic partners that believe in the same
Ant Group is the owner and operator of Alipay, serving
mission that we do [at] 10x1000.”
hundreds of millions of users, and connecting them with
For more information on 10x100 Tech for Inclusion or to get involved, visit the merchants and partner financial institutions that offer inclusive
website: www.10x1000.org financial services and digital daily life services such as food
delivery, transport, entertainment, and healthcare.
#fintechpulse
28
Global insights | Fintech segments | Featured interview Spotlight article Regional insights
Spotlight
Putting big data at the heart of ESG decision-making
#fintechpulse
29
Spotlight — ESG
Putting big data at the heart of ESG decision-making
“
Contributors: Budha Bhattacharya and Kin Yu, KPMG in the UK But doing so is not straightforward. Whereas financial reporting is
standardized and in familiar formats, corporate reporting around ESG What was once a niche
ESG issues have always been important in the financial and corporate
landscape, but over the past 18 months or so, it’s been taken to a new level. dimensions is anything but. Companies are not obliged to report most activity for green funds
The COVID-19 pandemic has hugely increased the focus on the health and ESG-related information; therefore, practice is fragmented and has grown far beyond
sustainability of our planet, together with pressing questions of social equality disparate. There are few common templates, meaning that companies that, with big pension
and cohesion. Climate change concerns have escalated, the Black Lives will publish different information in different ways. There are a multitude funds and other prominent
Matter movement has become a powerful force, geopolitical risks and of surveys in the market, but these only offer limited help: companies
institutions leading the
tensions continue to create volatility — the list goes on. participate in some surveys but not others, and might answer slightly
way. They are pushing
differently each time.
Along with a continuing focus on governance, ethics and compliance, companies towards doing
all of these factors have combined and coincided to propel ESG to new Much ESG information is also self-reported. Inevitably, this opens the
the right thing. Words are
levels of significance. And they are being particularly championed by possibility of ‘greenwashing’. Understandably enough, corporates are
not enough. There’s been
”
the Millennial generation — that is about to inherit probably the biggest keen to paint themselves in the best light possible.
transfer of wealth ever seen over the next two decades as baby a sea change.
boomers pass the baton. Millennials want to know not just how much Two-speed market Budha Bhattacharya
return an investment will make, but how it will make that return and at Cutting through the noise, obtaining relevant information quickly, and KPMG, KPMG in the UK
what cost to people, planet or communities. analyzing it effectively is, therefore, much harder than perhaps it needs
This means that investments have to be repurposed toward something to be. We have also seen the opening of something of a two-speed
more meaningful than straight returns. Increasingly, institutional as well market. Big global institutions across banking, fund management and
as individual investors are throwing their weight behind this — becoming insurance have been highly active in either building their own in-house
the main drivers for change in financial markets. data analytical capabilities for ESG such as State Street, Goldman
Sachs, JPMorgan or acquiring one of the new breed of fintech data
The ESG data challenge aggregators — or a combination of both. M&A in this space has been
The investor sentiment shift toward conscientious society, a greener prolific. For example, Blackrock recently bought Baringa’s Climate
planet and improved governance practices is driving all financial Change Scenario Model and integrate it into its Aladdin risk
institutions, whether big or small, traditional or fintech, to be fully management framework,21 while HSBC Asset Management bought a
cognizant and in control of the ESG profile of their investment and stake in Radiant ESG,22 a US-based ESG asset management startup.
underwriting positions, and embed ESG considerations into their
reporting and risk management frameworks. 21 https://www.reuters.com/business/sustainable-business/blackrock-buy-baringa-partners-climate-tech-aladdin-2021-06-17/
https://www.about.us.hsbc.com/news-and-media/hsbc-asset-management-finances-the-launch-of-radiantesg-global-investors
#fintechpulse
22
30
Spotlight — ESG
Putting data at the heart of ESG decision-making
“
This means that the big institutions are able to track data signals across beyond this, scoring whole investment funds, sovereign wealth funds,
multiple sources and decipher them almost instantly. They can react to bonds, equities, structured bonds (tranches of RMBS/CMBS/ABS etc.) You can’t manage what you
breaking news and adjust their positions in response. or an illiquid product such as loans or mortgage-backed securities. can’t measure — so robust
ESG data is key. There’s a
In recent years, even large credit rating agencies and market data The tool also enables clients to unravel the score, providing the
root-cause-analysis of what factors and issues have led to the rating. lot of noise in the market
providers went on a buying/acquiring spree to remain competitive and
cater to the ESG and sustainability related demand. The client can then determine for themselves the materiality of the and of course some
findings — recognizing that different factors may have a greater or selective ‘greenwashing’
KPMG’s ESG IQ platform lesser weight depending on the client’s guiding ESG strategy. For too. It’s becoming a pre-
For others, it remains much more difficult, especially when resources example, we have used the tool with one of the biggest US based Asset requisite to have access to
are constrained across multiple competing priorities. However, there Managers to help their treasury team unravel their asset-backed
AI-powered tools that ingest
are tools available to help — such as KPMG’s ESG IQ platform. portfolio with structured bonds, sovereigns, agencies, municipals,
structured and unstructured
government bonds and more.
ESG IQ is an analytics platform developed by KPMG’s Lighthouse data data across multiple
scientists and engineers, in conjunction with some of the largest asset A critical capability sources and give fast and
managers and Google. ESG IQ enables clients to select and pool both ESG data is rapidly becoming a mini industry of its own, with some 200 reliable analysis on which to
structured ESG reference data from multiple providers and unstructured
data providers and a plethora of Fintech startups already operating in base decisions. You need
”
data from a wide range of sources, including news reports, social media
the market, globally. This in itself reflects the importance now attached
posts, blogs, NGO reports, research reports, and pages across the tools you can trust.
to ESG. It has well and truly moved into the mainstream of financial
web. The platform can even pull out ESG data from ‘dark data pools’, Kin Yu
services and is on its way to redefine capital markets as we know it,
such as legal documents, trade confirms (depending on the asset KPMG in the UK
into a more transparent and conscientious one.
class), and other sources using advanced Natural Language
Processing (NLP). For any financial institution, ESG-related decision-making is a critical
capability. Ensuring you have the tools to do this is not a nice to have
We believe it is unique in that other score providers can only score
but an increasingly essential requirement.
individual entities or companies. But the ESG IQ platform can go
#fintechpulse
31
Global insights | Fintech segments | Featured interview | Spotlight article Regional insights
In H1 2021, fintech investment in the Americas reached
$51.4B with 1,188 deals
#fintechpulse
32
Regional insights — Americas

Americas attracts $51.4 billion in fintech investment, including record $31 billion in VC
Fintech investment in the Americas reached $51.4 billion in H1’21, with VC investment accounting for $31 billion — shattering the previous annual high of $24 billion set in 2020.
The continued innovations in financial technology, combined with the dramatic increase in use of digital offerings has made fintech one of the most active sectors of investment,
both from a VC perspective and from an M&A standpoint. Key H1’21 highlights from the Americas include:
Payments hot across the Americas Consolidations in the B2B space
The payments space was incredibly active in H1’21. Exits got a significant amount of H1’21 saw a number of consolidations occurring in the B2B space, including Bill.com’s
attention in the US — with alternative lender Affirm raising $1.2 billion in its IPO and acquisition of Divvy. The B2B payments space is quite hot and is expected to remain
Deluxe acquiring First American Payments for $960 million.23 VC funding in the very attractive to investors given the amount of room it has to grow as companies
payments space was particularly notable in Latin America where Brazil-based Nubank across the Americas move from cheque-based payments to electronic payments. As
raised $1.5 billion. companies look to scale and gain market share, more consolidations will likely occur.
Valuations driving unicorn births Wealthtech sector growing at a rapid pace in Americas
Interest in wealthtech grew considerably in the Americas during H1’21, with US-based
Fintech valuations remained high in H1’21 as investors continued to see the space as
Robinhood raising $3.4 billion and Canada-based Wealthsimple raising $600 million. PE
attractive and well-performing. This likely drove the explosion of unicorn births in the
firms Motive Partners and Clearlake Capital also bought an 80 percent stake InvestCloud
first half of 2021. While the importance of unicorn status is waning in the US given its
during H1’21.
proliferation of unicorns, it is still a significant milestone elsewhere in the Americas. In
H1’21, Canadian e-commerce company Clearco and ID verification firm Trulioo Trends to watch for in H2’21
became unicorns, in addition to Mexico-based cryptocurrency platform Bitso. — increasing investments by PE firms focusing on fintech
— continued investment growth in areas including payments, alternative lending,
Corporates getting into crypto space crypto and wealth management
During H1’21, a number of corporates in the US made big bets on cryptocurrencies, — an increase in SPAC acquisitions focused on unicorn and near unicorn fintechs
including Paypal — which acquired crypto-security firm Curv in H1’21 following its — bigger deals across the Americas, particularly in Latin America as fintechs continue
announcement of a partnership with Paxos in late 2020. Paypal ventures contributed to mature
to Paxos’s $300 million raise in H1’21.24 Facebook, through the Diem Association, — emergence of super apps and platforms that provide consumers with a broader
also continued to move forward with its plans to launch a US dollar stablecoin before range of offerings — including financial products.
the end of the year.25
23 https://www.pymnts.com/news/partnerships-acquisitions/2021/deluxe-signs-960-million-acquisition-deal-for-first-american-payments
24 https://www.forbes.com/sites/ninabambysheva/2021/04/29/paypal-crypto-partner-paxos-raises-300-million-at-24-billion-valuation/?sh=531a310d180f
25 https://www.nasdaq.com/articles/facebook-to-launch-diem-cryptocurrency-amid-rising-digitalization-2021-05-18
#fintechpulse
33

First half of 2021 notches record VC invested, en route to a mammoth year
Total investment activity (VC, PE and M&A) in fintech in the Americas Venture activity in fintech in the Americas
2018–2021* 2018–2021*
$150 1,731 1,697 2,000 $40 1,343 1,500
1,599 1,306 1,294
1,188 1,500 $30
$100 960 1,000
1,000 $20
$50 500
500 $10
$49.6 $119.9 $82.4 $51.4 $16.1 $19.8 $24.3 $30.7
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
M&A activity in fintech in the Americas PE growth activity in fintech in the Americas
2018–2021* 2018–2021*
$120 400 $3,000 60
52
$100 380 302 $2,500 50
263 45
300 42
$80 $2,000 40
201
$60 200 $1,500 30
27
$40 $1,000 20
100
$20 $500 10
$32.9 $98.6 $56.7 $18.0 $562.5 $1,455.9 $1,396.5 $2,754.0
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
Deal value ($B) Deal count Deal value ($M) Deal count
#fintechpulse
34

Corporates join in record sum of VC invested
VC activity in fintech with corporate participation in the Americas Thanks to a red-hot venture financing market, investment in fintech is on the
2018–2021* rise nearly everywhere. The stratospheric level of late-stage VC valuations
$15 400 points to investor enthusiasm for mature fintech companies, as well as ample
317 324 sums of dry powder that fund managers are looking to disburse even as the
279 300
$10 260 environment remains quite competitive. Much of this surge can be attributed
200 to late-stage companies capitalizing on a very accommodating funding
$5 environment for large infusions of private capital en route to going public via
100
the emerging variety of routes such as direct listings or SPACs.
$6.0 $8.0 $11.4 $12.8
$0 0
2018 2019 2020 2021*
Median M&A size ($M) in fintech in the Americas Median pre-money valuations ($M) by stage in fintech in the Americas
2018–2021* 2018–2021*
$100 $440.0
$82.3
$80 $67.2
$60 $182.5
$43.0 $122.5
$40 $32.4 $85.4 $34.0
$29.0 $55.0
$20 $6.5 $26.0 $8.0 $10.0
$7.0
$0 2018 2019 2020 2021*
2018 2019 2020 2021*
Angel & seed Early VC Later VC
#fintechpulse
35

Q2 carries over financing volume momentum, leading to record half-year for total activity
Total investment activity (VC, PE, M&A) in fintech in the Americas M&A activity in fintech in the Americas
2018–2021* 2018–2021*
$90 700 $90 120

112 112
$80 620 $80 107

600 100
568
$70 $70
87 89
490 500 84
468 83
$60 $60 80 80
456
431 443 77 74
428
408 427 400 69
$50 $50
371 376 64
377 352 60
58
$40 300 $40
50
$30 $30 40
200
$20 $20
20
$8.1
$8.0
100
$8.2
$7.3
$7.5
$7.2
$10
$5.0
$10
$3.9
$11.6
$18.4
$12.3
$18.3
$83.4
$13.1
$16.6
$44.6
$24.0
$27.4
$2.6
$13.3
$14.3
$76.6
$36.8
$10.1
$2.2
$10.5
$8.6
$9.3
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
#fintechpulse
36

Q2 2021 sets multiple records for aggregate capital invested
Venture activity in fintech in the Americas VC activity in fintech with corporate participation in the Americas
2018–2021* 2018–2021*
$18 600 $9 160
$16 $8 136
499 140
500
$14 461 $7
124 120
$12 400 $6
366 368 341 349 100
353
$10 340 333 $5 91 91
315 79 81
301 298 300 81 81 80
294 75
$8 285 $4 73
66 67 70
65 60
$6 200 $3
40
$4 $2
100
$2 $1 20
$14.1
$16.7
$1.1
$1.4
$1.7
$1.8
$1.6
$2.1
$2.6
$1.6
$2.8
$2.8
$2.9
$3.0
$5.0
$7.8
$3.3
$3.9
$5.0
$3.9
$3.8
$5.2
$6.2
$4.5
$5.7
$5.3
$5.8
$7.5
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
Deal value ($B) Deal count Angel & seed Early VC Later VC Deal value ($B) Deal count
#fintechpulse
37
Regional insights — Americas: Canada

Canada attracts record $4.8 billion in fintech investment in H1’21: how high can it go
by year end?
“
— Total fintech investment in Canada skyrocketed to $4.8 Total fintech investment activity (VC, PE and M&A) in Canada
billion in the first half of the year, already surpassing the 2018–2021* As a result of COVID-19,
previous annual record, set in 2017. $4,500 70
many, if not most, financial
institutions really had to
— Canada saw robust M&A deal value in H1’21, driven accelerate their digital
$4,000
primarily by Nasdaq’s acquisition of cybersecurity firm 59 60 capabilities. To do this,
Verafin for $2.7 billion and a number of smaller M&A $3,500 many recognized that they
deals, including the $265 million acquisition of PayBright could get some of those
49 50
by Affirm and the $113 million acquisition of Flexiti by $3,000 capabilities more quickly
Curo.26 45
42 and efficiently by partnering
$2,500 40 with fintechs. This
— Canada is attracting larger VC deals as fintech startups 39
mature, evidenced by Wealthsimple’s $600 million raise 35 realization, combined with
and Fraction Technologies’ $220 million raise in H1’21. $2,000 31 30 Canada’s strong and
28 27
27 maturing fintech ecosystem
— Corporate interest and investment in fintech continued to $1,500 23 has helped drive the strong
diversify, both to accelerate internal capabilities and to 20
uptick in fintech investment
”
18 19
support others; in H1’21, RBC launched RBCx — a 19
$1,000 here.
$452.5
$435.6
platform aimed at providing holistic financial and
$380.7
$315.2
$225.4
10
$247.6
$188.6
$1,786.8
$3,845.8
entrepreneur support services to technology startups.27 John Armstrong
$104.3
$500
$679.5
$994.5
$82.7
$33.5
Partner,
— Fintech investment is expected to remain strong in National Financial Services Leader,
$0 0 KPMG in Canada
Canada, particularly in AI-driven solutions, payments, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
and crypto.
2018 2019 2020 2021
Deal value ($M) Deal count

26 https://ca.finance.yahoo.com/news/deluxe-completes-acquisition-first-american-140000269.html
27 http://www.rbc.com/newsroom/news/2021/20210615-rbcx-platform.html Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook),
*as of 30 June 2021.
#fintechpulse
38
Regional insights — Americas: United States

VC investment in the US surges to over $25 billion
“
Total fintech investment activity (VC, PE and M&A) in the US
— US VC investment in fintech surged past 2020’s 2018–2021*
The market is definitely
peak high of $22 billion with 6 months left in the $90 600
picking the winners now, with
year, led by the $3.4 billion raise by Robinhood, a the bigger and more
$600 million raise by Stripe and $500 million $80 established companies
517 growing and having an easier
raises by Better, ServiceTitan, and DailyPay. 500
$70 time raising money than
— The maturation of the US fintech sector was 466 others. That said, innovative
evident in the robust exit activity in H1’21,
$60 384 400 companies will continue to
including Affirm’s successful IPO, the direct listing 376 380 375
354 357 364 get funding. There’s still a lot
of Coinbase, the SPAC merger of SoFi with Social 346
$50
319 of opportunity for companies
Capital Hedosophia Holdings Corp. V, and the 307 311 300
305 looking at aspects of financial
SPAC merger of insurtech Clover Health with $40 services differently — like
Social Capital Hedosophia Holdings Corp. III.
Pipe, which raised $250
$30 200
— Payments M&A was a hot ticket in the US as million in H1’21 to support its
companies looked to gain breadth and market unique approach to working
$20
capital financing for
”
share. In H1’21, Deluxe acquired First American
100
$7.1
Payments by Deluxe, Repay acquired BillingTree, merchants.
$6.5
$5.9
$10
$12.5
$11.7
$17.2
$82.0
$12.3
$15.8
$43.7
$19.3
$22.8
$10.8
and Bill.com acquired Divvy.
$9.2
Robert Ruark
— Fintech investment in the US will likely remain $0 0 Principal, Financial Services Strategy
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 and Fintech Leader,
robust in H2’21, particularly in payments, KPMG in the US
wealthtech, and crypto; interest in lending could 2018 2019 2020 2021
also open up as consumers look to travel and
spend more post-pandemic. Deal value ($B) Deal count
#fintechpulse
39
Americas
Top 10 fintech deals in the Americas in H1 2021
1. Robinhood — $3.4B, Menlo Park, US — Wealth/investment management

— Series G
2
2. Verafin — $2.75B, St. John’s, Canada — Institutional/B2B — M&A
7
1 3 9
3. Divvy — $2.5B, Draper, US — Payments/transactions — M&A
4
8
10 4. SoFi — $2.4B, San Francisco, US — Lending — Reverse merger
6 5. Nubank — $1.5B, Sao Paulo, Brazil — Banking — Series G
6. Acima Credit — $1.4B, Sandy, US — Lending — M&A
7. BTC.com — $1.3B, Los Angeles, US — Blockchain/cryptocurrency — M&A
5 8. First American Payments — $960M, Fort Worth, US — Payments — M&A
9. Clover Health — $828M, Franklin, US — Insurtech — Reverse merger
10. InvestCloud — $800M, West Hollywood, US — Wealth/investment
management — Buyout
#fintechpulse
40
In 2021, investment in fintech companies in Europe,

Middle East and Africa (EMEA) recorded
$39.1B with 792 deals
#fintechpulse
41
Regional insights — EMEA

EMEA region sets numerous records as fintech investment hits $39 billion
Total fintech investment in the EMEA region continued to surge, with over $39 billion invested in H1’21, compared to 2020’s total of $26 billion. The region also shattered its previous
annual high for fintech VC investment, attracting $15 billion in H1’21, compared to $9 billion during all of 2020.
Top deals included the $14.8 billion deal by Refinitiv, the $2.6 billion acquisition of Itiviti by Broadridge Financial Solutions,28 the $1.5 billion SPAC merger of Paysafe Group with Foley
Trasimene Acquisition Corp.,29 and two VC raises totaling over $1.9 billion by Klarna. Key H1’21 highlights from the EMEA region include:
A diversity of jurisdictions attracting big investments Fintech business models gaining traction
The EMEA region attracted numerous large deals in H1’21; these deals extended well As a result of the pandemic, consumers across the EMEA region have gotten more
beyond the UK, Germany and Sweden — from the $800 million PE investment in Abu comfortable with digital products and services which has helped drive uptake for digital
Dhabi-based Group 42 and the $600 million PE buyout of Ireland-based Fenergo to banking, insurance, wealth management, and other products. This has helped a broad
$100 million+ VC funding rounds in the Netherlands (i.e., Mollie, Bunq), France (e.g., range of fintechs in the region to grow and, therefore, attract larger investments.
Ledger, Market Pay, Shift Technology, Alan, and others ), Austria (i.e., BitPanda), the
Czech Republic (Twisto), and Saudi Arabia (Tamara). Corporate investment at an all-time high
Corporate-affiliated VC investment in the EMEA region soared to a record high in
Wealthtechs attracting significant interest in H1’21 H1’21, with $5.2 billion invested compared to $5.1 billion in all of 2020. Given the
Wealthtech was an incredibly hot area for investment in the EMEA region, with US- digital trends that have accelerated as a result of COVID-19, many corporates across
based JP Morgan acquiring UK-based Nutmeg for $989 million and Germany-based the financial services sector have turned their attention to rapid digitization, whether by
Trade Republic raising a $900 million VC funding round during H1’21. making direct investments, acquisitions, or forming partnerships with fintechs.
Digital banks continue to draw attention Trends to watch for in H2’21

Investment continued to pour into digital banks in the EMEA region in H1’21, including — stronger focus on the B2B space, including areas like SME lending
a $443 million raise by Starling Bank and a $110 million raise by Solarisbank.
— increasing interest in M&A, IPOs, and potentially mergers with US-based SPACs
Investors in Europe are beginning to make bets on which banks will evolve into truly
pan-European banks able to fulfill the diverse needs of their customers. — more fintechs embracing ecosystem models in order to act as a one-stop shop for
customers
— growing focus on ESG and sustainability-focused fintech offerings.
28 https://www.itiviti.com/news/broadridge-completes-acquisition-of-itiviti-extending-capital-markets-franchise
29 https://www.paysafe.com/en/paysafegroup/news/detail/paysafe-completes-business-combination-with-foley-trasimene-acquisition-corp-ii/
#fintechpulse
42

2021 sees deal value almost match the entirety of 2020 already
Total investment activity (VC, PE and M&A) in fintech in EMEA Venture activity in fintech in EMEA
2018–2021* 2018–2021*
$80 1,277 1,500
1,200 1,198 $20 1,500
$60 1,040
1,000 $15 989
792 940 1,000
$40 $10
641
500 500
$20 $5
$60.1 $70.9 $25.7 $39.1 $5.1 $8.0 $9.4 $15.1
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
M&A activity in fintech in EMEA PE growth activity in fintech in EMEA

2018–2021* 2018–2021*
$80 250 $2,500 50
221 202
39
182 200 $2,000 35 40
$60
150 $1,500 27 30
$40 125 26
100 $1,000 20
$20
50 $500 10
$52.9 $62.3 $15.7 $22.4 $2,108.1 $582.2 $580.2 $1,551.4
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
#fintechpulse
43

Amid strong investment levels, median M&A size surges
VC activity in fintech with corporate participation in EMEA Across the entire fintech ecosystem, investment levels are on the rise. EMEA
2018–2021*
has seen massive fundings of venture-backed unicorns as well as significantly
$6 300
248 sized mergers as incumbents seek to consolidate. M&A size has consequently
$5 250
215 surged in the first half of the year, even as a rising tide of capital has pushed
187
$4 200 up late-stage venture valuations in particular. Corporates have contributed to
174
$3 150 the rise in VC invested, joining in rounds worth an aggregate of $5.2 billion in
$2 100 2021 already, outstripping the massive tally from 2020. Fintech is seeing such
$1 50 levels of activity in EMEA especially as incumbents compete for market share
$2.3 $3.7 $5.1 $5.2 and newer entrants vie for category leadership across the disparate payments,
$0 0
2018 2019 2020 2021* wealthtech and insurtech spaces in particular.
Median M&A size ($M) in fintech in EMEA Median pre-money valuations ($M) by stage in fintech in EMEA
2018–2021* 2018–2021*
$80
$70 $69.3 $51.5
$60 $50.6
$50 $31.1
$40 $23.3
$21.8
$28.9 $13.5
$30
$10.0 $13.2
$20 $18.8 $9.7
$4.5 $5.1 $5.9
$3.7
$10
$0 2018 2019 2020 2021*
2018 2019 2020 2021* Angel & seed Early VC Later VC
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. Note: The median M&A size
in 2021* is based on a population where n = 22.
#fintechpulse
44

M&A volume surges in first quarter of 2021
Total investment activity (VC, PE and M&A) in fintech in EMEA M&A activity in fintech in EMEA
2018–2021* 2018–2021*
$60 450 $60 80

419
400 71 70
69
$50 373 $50
346 346 350
59 60
326 328
311 310 311 56
$40 296 300 $40 54
295
284 51 50 50
49 49 48
259 263 46
250 44 44
$30 $30 40 40
200
30
$20 150 $20
20
100
$10 $5.1 $10
$5.1
$5.1
$4.7
$4.2
$4.2
$4.3
50 10
$2.4
$2.2
$2.1
$1.8
$21.0
$25.6
$55.6
$16.0
$23.8
$15.3
$19.4
$24.2
$53.6
$13.2
$17.7
$1.6
$7.1
$6.4
$6.8
$0.6
$0.0
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
#fintechpulse
45

Massive momentum carries over into record-breaking 2021
Venture activity in fintech in EMEA VC activity in fintech with corporate participation in EMEA
2018–2021* 2018–2021*
$10 350 $3,000 100

333
$9 87 90
308 300 87
287 $2,500
$8 80
265 270
261 247 75
254 254 250
$7 246 70
234 $2,000 68
231
218 60 60
$6 58
202 200 55 55
$1,500 49 55 50
$5 49
47
150 43
$4 40
36
$1,000
$3 30
100
20
$2 $500
$1,018.8
$1,018.0
$1,101.0
$1,732.0
$1,524.3
$2,850.8
$2,360.2
50
$573.7
$649.7
$654.5
$736.7
$895.2
$784.1
10
$388.9
$1
$1.1
$1.6
$1.1
$1.3
$2.5
$2.0
$1.8
$1.7
$1.6
$2.0
$3.2
$2.7
$5.7
$9.4
$0 0
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2018 2019 2020 2021
2018 2019 2020 2021
Deal value ($B) Deal count Angel & seed Early VC Later VC
#fintechpulse
46
Regional insights — EMEA: United Kingdom

UK sees $24.5 fintech investment in H1’21 as VC funding hits new high
“
— Both VC investment in fintech and deal volume in the Total fintech investment activity (VC, PE and M&A) in the UK
UK reached new quarterly highs in Q1’21 and then 2018–2021* COVID-19 sparked a real
climbed even further in Q2’21. Across the 2 quarters, $60 160 race to digital in the financial
Fintech-focused VC investment in the UK reached $6.2
services space here in the
billion – bolstered considerably by the massive $14.8
143 140
140 UK, which has spurred on
billion Refinitiv deal.
$50 132
129
133 the major banks. Many of
124
120 120 them have diverted large
118
— Most subsectors of fintech are attracting attention from 112 112 swaths of their investment
$40 108 109
investors in the UK, including payments, wealthtech, 105 pots into digitization —
100
insurtech, regtech, cybersecurity, and others — due, in which is a major reason we
part, to changing customer behaviors, but also due to are seeing so much
$30 79 80
the amount of dry powder in the market and the broader corporate investment right
range of investors. now. The same is true for
60
— Momentum is building in the UK around the SME $20 other incumbents in other
financial services subsectors
”
lending space and the lending ecosystem in terms of 40
KYC and customer due diligence. as well.
$10
$5.3
$4.4
— The ‘Buy Now, Pay Later’ space has seen exponential 20 John Hallsworth
$2.7
$2.4
$2.5
$13.1
$20.9
$50.9
$20.1
$1.2
$1.6
$1.5
Partner
$1.1
$0.6
growth in the UK, with numerous companies sprouting KPMG in the UK
up; in H1’21, Zilch raised $81 million, while Butter raised $0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
$22 million. During H1’21, a government review
2018 2019 2020 2021
recommended BNPL products be regulated — which
could affect the space in the future.30 Deal value ($B) Deal count
— Fintech areas to watch in the UK include revenue- Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30
based financing for SMEs and ESG solutions related to June 2021.
financial inclusion, carbon tracking and offsets.

30 https://www.cnbc.com/2021/02/02/uk-to-regulate-buy-now-pay-later-bnpl-firms-like-klarna-and-clearpay.html
#fintechpulse
47
Regional insights — EMEA: Germany

Fintech investment in Germany surpasses $2.5 billion in H1’21
“
— VC investment in Germany skyrocketed in Total fintech investment activity (VC, PE and M&A) in Germany
2018–2021* Fintechs in Germany are
H1’21, led by a $900 million raise by
$2,500 45 now taking their products
wealthtech Trade Republic, a $650 million raise
and services to the next
by digital insurer Wefox and $100 miillion+ 39 40 level. Many started by
raises by Scalable Capital, Mambu and
$2,000 developing front-end
Solarisbank. 35
technologies — which had
— Both digital banking and digital insurance
30 30
them focusing mostly on
28
continue to be hot areas of investment in
$1,500 27 27 29 marketing and product
24
Germany, due, in part, to the growing 25 front-end (using banking
24
acceptance of digital business models by 23
22 and payment as a service)
20
consumers. 20 20
19
20 acquisitions. Now, we’re
$1,000
— Wealthtech companies, particularly trading seeing them move into
15
platforms such as Trade Republic, are gaining regulated areas in order
to better compete with
$337.1
$311.0
a lot of attention from investors in Germany, 10
$291.4
$260.0
$500
$218.7
banks — which means
$189.2
$167.0
who see the space as one that will likely grow
$1,149.2
$2,220.1
they are focusing more on
$346.2
$488.0
$357.3
$957.7
$82.7
5
significantly in the future.
building their regulatory
— Looking forward, the crypto and digital asset $0 0
infrastructure and building
”
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
space will be one area to watch in Germany — out their products.
not only in terms of trading platforms, but also 2018 2019 2020 2021
solutions focused on other areas of the value Deal value ($M) Deal count Bernd Oppold
Partner, Advisory,
chain. KPMG in Germany
#fintechpulse
48
Regional insights — EMEA: France

France sees $2 billion in fintech investment during H1’21 as fintech market keeps evolving
“
— The fintech market in France has evolved very rapidly Total fintech investment activity (VC, PE and M&A) in France
over the past couple of years, with numerous fintechs 2018–2021* Historically, it has been
attracting larger deals; in H1’21, Ledger raised $380 $10,000 40 difficult for insurance
million, PE firm AnaCap bought 60% of Market Pay for
companies to really
37
$363 million, Shift Technology raised $220 million, and
$9,000 innovate and develop new
35
Alan raised $219 million.
products and services.
$8,000 To better accelerate
— Fintech investors in France are focused on a wide range 30 30 innovation, these
of opportunities, including insurtech, B2B services, $7,000
27
incumbents are investing
cybersecurity, and ‘buy now, pay later’ offerings. 25 25 25 a lot in insurtechs that can
$6,000
— Digital banks in France have focused significantly on 22
23 help them improve their
building partnerships with other fintechs, such as credit- $5,000 20 customer experience or
19 18
as-a-service or payment-as-a-service partners to 18 18 18 expand their service
offerings into other areas
”
improve their capabilities and better serve their clients. $4,000
15 15
In H1’21, Orange Bank announced a partnership with 14 of financial services.
$3,000
Younited to boost its consumer credit offerings.31 Stephane Dehaies
10
$1,130.6
Associate Partner, Management
— The French government is very focused on fintech as a $2,000
$903.2
Consulting, FSI,
growth opportunity and is committed to a range of KPMG in the UK
$9,416.6
$358.1
5
$1,481.1
$155.3
$107.8
$133.6
$117.2
$204.8
$108.7
ecosystem support activities, including education to $1,000
$47.6
$59.5
$82.9
develop talent with essential fintech capabilities.
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2018 2019 2020 2021
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook),
*as of 30 June 2021.
31 https://www.fintechfutures.com/2021/06/orange-bank-partners-younited-to-underpin-consumer-credit-boost/
#fintechpulse
49
Regional insights — EMEA: Nordics / Sweden

Klarna powers Nordic region to new VC investment high of $2 billion
“
— The $4.8 billion in total fintech investment in the Total fintech investment activity (VC, PE and M&A) in Sweden
Nordics was primarily driven by three deals in Sweden:
2018–2021* The Nordic region — and
the $2.6 billion acquisition of trading platform company
$3,500 25 Sweden in particular — is
Itiviti by Broadridge Financial Solutions32 and two a good incubator for new
22 types of fintech
funding rounds totaling $1.9 billion by Sweden-based $3,000
‘buy now, pay later’ company Klarna. 20 innovations, apps and
$2,500 solutions. Sweden is
— The M&A market in the Nordic region was incredibly 17 17
robust in H1’21. In addition to the completed Itiviti heavily influenced
acquisition, open banking platform Tink acquired $2,000
15
14
15 culturally by the US for
14
Germany-based open banking platform 13 example, so if you test
12
FinTecSystems.33 Shortly thereafter, Visa announced $1,500 11 something in Sweden and
its acquisition of Tink for $2.1 billion — in a deal subject 10 10 it works, then it’s fairly
9
easy to roll out in other
”
to regulatory approval.34
$1,000 7 7
— Sweden, which has the most mature fintech ecosystem 6 markets with confidence.
$346.6
5
$290.2
in the Nordic region, attracted the majority of fintech
$209.0
$233.4
Martin Ekstedt
$2,188.2
$1,375.5
$3,230.2
$500
$899.0
$817.0
$704.4
$85.6
investment during H1’21. The largest deals in the other Partner, Corporate Finance
$488.3
$21.9
$8.8
KPMG in Sweden
Nordic countries included Norway-based Arcane
$0 0
Crypto’s $33 million SPAC merger with Vertical
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Ventures AB,35 a $25 million raise by Finland based
2018 2019 2020 2021
Tesseract and a $23 million raise by Kompasbank in
Denmak. Deal value ($M) Deal count
— Looking ahead, the SME sector in the Nordic region Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as
could see some consolidation given the number of of 30 June 2021.
small companies with good technologies behind them.

There could also be more cross-border M&A activity. 32
33
https://www.itiviti.com/news/broadridge-completes-acquisition-of-itiviti-extending-capital-markets-franchise
https://tink.com/press/tink-acquires-fintecsystems/
34 https://www.forbes.com/sites/iainmartin/2021/06/24/visa-buys-swedish-fintech-tink-for-21-billion-after-plaid-takeover-blocked/?sh=48028f0b115f
35 https://www.finextra.com/pressarticle/86049/arcane-crypto-finalises-nasdaq-listing
#fintechpulse
50
Regional insights — EMEA: Ireland

Ireland sees incredible start to the year with almost $900 million in total fintech investment
“
— Ireland attracted $900 million of fintech investment in Total fintech investment activity (VC, PE and M&A) in Ireland
2018–2021*
COVID-19 has accelerated
H1’21 — far surpassing the $700 million previous record
$1,000 12 phenomenally the digitization
set in 2011. Three large deals drove investment levels: the
11
of businesses and business
$600 million buyout of Fenergo by PE firms Astorg and $900
10 models. That offers huge
Bridgepoint,36 the $200 million acquisition of Taxamo by 10 10 10
$800 9 opportunities for fintech
Vertex, and the $74 million VC raise by Wayflyer. 9
$700 8 businesses and to the
— Investor interest in regtech is particularly strong right now, 8 8 constituent elements of
as evidenced by the Fenergo deal and it’s only expected $600 6 7 fintech. Payments is a good
to grow over the next few years given the changing $500 6 6 6 6 example. Throughout 2020,
regulations in financial services. we saw consumers give up
$400
— Many of the fintechs in Ireland are globally focused, cash almost entirely,
4
making them very attractive to global investors. Wayflyer, $300 embracing alternative
3 payment methods. This
for example, provides finance for merchants and other $200
$97.5
acceleration to digital first
$74.4
2
$54.5
$73.6
partners to accelerate their growth over the internet, while
$52.6
$45.6
$890.4
$167.7
$30.2
and the opportunities it
$16.5
$12.4
$100
$0.7
$4.7
$7.4
Taxamo is focused on helping clients meet their global tax .
compliance obligations. $0 0 creates for fintech
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 businesses has undoubtedly
— Digital banks have started to gain some traction in Ireland, 2018 2019 2020 2021 driven a lot of the interest
particularly Revolut and N26. Increased competition from and investment in the fintech
”
challenger banks is certainly putting pressure on the pillar space in 2021.
banks in Ireland who have responded and are invest very
heavily in their own digital infrastructure. This healthy
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of
30 June 2021.
Anna Scally
Partner and Fintech Leader,
competition is good for consumers and business KPMG in Ireland
customers alike.
36 https://www.fenergo.com/press-releases/astorg-and-bridgepoint-acquire-financial-software-company-fenergo/
#fintechpulse
51
Regional insights — EMEA: Saudi Arabia

Saudi Arabia sees first $100 million+ fintech VC round
“
— The fintech market in Saudi Arabia is in startup mode, with a Total fintech investment activity (VC, PE and M&A) in Saudi Arabia
growing number of fintechs attracting attention — primarily at 2018–2021* There is a lot of diversity in
the earliest of deal stages. In H1’21, Saudi Arabia saw its $300 8
the sandbox program.
largest Seed round ever in January 2021: a $6 million raise by
While the majority are
‘buy now, pay later’ company Tamara. Tamara followed this
payments-focused
7 7
with Saudi Arabia’s first $100 million VC round in April: a $110 $250 fintechs, we are also
million Series A raise led by Checkout.com.37
seeing fintechs focused on
6
remittances, point-of-sale
— The Saudi Central Bank (SAMA)’s fintech sandbox has been a $200 devices, small mom and
major driver for innovation, allowing fintechs the opportunity to 5
pop stores offering digital
test their new digital solutions; a number of early sandbox payments. Tamara is a
participants are now starting to mature. $150 4 sandbox success story.
— Banks in Saudi Arabia are now working to step up their game, The buy-now-pay-later
3 3
partnering with fintechs in order to digitize their services — company has evolved
$100
rapidly and recently raised
”
such as Banque Saudi Fransi’s partnership with Hala to offer 2
its customers a digital wallet on their mobile phones. 2 2 2 $110 million.
— Saudi Payments operates a national payments system. $50 1 Ovais Shahab
$23.9
1
1 1 1 1 Head of Financial Services
$12.5
They’ve been very active in connecting all the dots between
$266.3
$112.7
$50.0
KPMG in Saudi Arabia
$2.6
$3.5
$2.1
incumbent banks, fintechs and consumers. 0
$0 0 0 0 0
— Over the next 6 months, fintechs will continue to evolve and Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
grow, particularly in payments, remittances and microfinancing. 2018 2019 2020
Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of
30 June 2021.
37 https://english.alarabiya.net/business/economy/2021/04/22/Checkout-com-leads-110million-round-for-Saudi-buy-now-pay-later-startup-Tamara
#fintechpulse
52
Regional insights — EMEA: United Arab Emirates
Investor interest in the UAE spurred by $800 million PE deal in Abu Dhabi
“
— The UAE reached the EMEA top 10 fintech deals list with an Total fintech investment activity (VC, PE and M&A) in UAE
2018–2021* Accelerators and events
$800 million PE investment by Silverlake into Abu Dhabi-
$900 14 are an important part of
based Group 42 — an AI driven cloud computing companies 13 building up the fintech
that focuses on digitization of businesses.38
$800 ecosystem in the UAE.
12
— The digital bank space got some attention in H1’21 with the H1’21 saw some interesting
announcement of the upcoming launch of Zand — the UAE’s $700 developments in this area.
first independent digital bank. 10 The Ministry of Economy
— International interest in the UAE continued to grow, with both
$600 and the Securities and
Ireland-based regtech company DX Compliance39 and US- Commodities Authority
$500 8 8 8 8
based payments firm Stripe40 launching operations in the UAE launched a Fintech
7 7 7
during H1’21. Megathon to help
$400 6 6 6 reimagine financial services
— During H1’21, the Financial Services Regulatory Authority of in the UAE. UAE
5 5
the ADGM introduced a framework to regulate open banking $300
4
technology ecosystem Hub
platforms in order to enhance consumer data protections.41 71 and US based Modus
$200 3
3 Capital also launched
— Looking forward, investment in payments and contactless
$72.5
$55.9
2 2 Ventures Lab — a program
$30.7
technologies is expected to remain strong in the UAE. Investor
$845.5
$100
$20.0
$18.0
$11.7
$14.1
aimed at helping early
$1.5
$9.8
$0.2
$0.6
$3.1
$6.1
interest in Islamic finance focused startups, such as Shariah
compliant fintechs, is expected to grow over the next few $0 0 stage founders build viable
”
quarters. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 products.
2018 2019 2020 2021
Gonçalo Traquina
Deal value ($M) Deal count Partner, Advisory
KPMG in the Lower Gulf
38 Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of
https://www.wsj.com/articles/silver-lake-invests-about-800-million-for-minority-stake-in-abu-dhabis-g42-11618394401
39 30 June 2021.
https://dxcompliance.com/dx-compliance-launches-new-regtech-location-in-the-uae/
40 https://stripe.com/newsroom/news/stripe-launches-uae
41 https://www.thenationalnews.com/business/banking/adgm-unveils-framework-to-regulate-open-banking-platforms-1.1195405
#fintechpulse
53
Regional insights — EMEA: Israel

Q2’21 sees record level of fintech investment in Israel
“
— Total fintech investment in Israel reached $240 million in H1’21, Total fintech investment activity (VC, PE and M&A) in Israel
including a record $188 million in Q2’21. During the quarter, both 2018–2021* Israel’s fintech sector
Earnix and Melio attained unicorn status. $200 16 continues to grow and
attract attention, with a
$180 14
— Insurtech attracted a significant amount of attention during 14 14 14 number of exciting
H1’21, with the successful IPOs of Libra Insurance Company on
$160
developments in H1’21,
the Israeli Stock Exchange and WeSure on the Tel Aviv Stock 12 including TipRanks’ $77
Exchange. $140 11 11 million Series B VC raise
10 and two successful IPOs in
— During H1’21, insurtech WeSure announced the acquisition of a $120
the insurtech space
local traditional insurer. Acquisitions by maturing fintechs are
expected to grow in Israel over time. $100 8 8 8 Looking ahead, interest in
7 7 7 digital banking and open
$80
— The first stage of Israel’s open banking regime began in H1’21, 6 6 banking will likely grow
with banks required to share information on customer chequing $60 5 given Israel’s evolving
accounts when requested by the customer; This, combined with 4 4 4 open banking regime and
future open banking initiatives, is expected to drive increased $40 the government’s efforts to
investment in fintechs able to support open banking offerings. increase competition in the
”
2
$141.9
$188.2
$20
$9.9
$57.8
$60.0
$23.9
$40.8
$24.9
$64.4
$40.0
$56.4
banking space.
$2.8
$1.5
$3.4
— In H1’21, Israel’s saw the launch of The First Digital Bank – the
$0 0
country’s first new bank in over 40 years. Ilanit Adesman
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Partner, Financial Risk Management,
2018 2019 2020 2021 KPMG in Israel
30 June 2021.
#fintechpulse
54
EMEA
Top 10Top 10 fintech deals in EMEA in H1 2021
global fintech deals in 2020
1. Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A
2. Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A
3. Paysafe Group — $1.45B, London, UK — Payments/transactions —
Reverse merger
4
4. Klarna — $1.29B, Stockholm, Sweden — Payments/transactions — Later 10 2
7
VC
1 8 6
5. Nutmeg — $989.4M, London, UK — Wealth/investment management — 5
M&A
3
6. Trade Republic — $900M, Berlin, Germany — Payments/transactions —
Series C
7. GoCo Group — $818.35M, Newport, UK — Consumer — M&A
8. Mollie — $805.8M, Amsterdam, Netherlands — Payments/transactions — 9
Series C
9. Group 42 — $800M, Abu Dhabi, UAE — Institutional/B2B — PE Growth
10. LendInvest — $681.4M, London, UK — Lending — Later VC
30 June 2021.
#fintechpulse
55
In H1 2021, fintech companies in Asia Pacific received
$7.5B with 467 deals
#fintechpulse
56
Regional insights — ASPAC

Fintech investment in Asia-Pacific rises to $7.5 billion in H1’21
Total fintech investment and deals activity in the Asia-Pacific region saw a solid rebound in the first half of 2021. After falling to $4.7 billion across 357 deals in H2’20, H1’21 saw $7.5
billion in investment across 467 deals. While both deal volume and value remained well shy of the record $25 billion across 504 deals seen in H1’18, the increased activity — particularly
without any very large megadeals — is a positive sign for continued fintech investment in the region. Key H1’21 highlights from the Asia-Pacific region include:
Platform focus remains incredibly strong in Asia-Pacific ‘Buy now, pay later’ offerings growing quickly
Platform players with strong fintech offerings continue to be very hot in the Asia- The payments space was incredibly robust across the Asia-Pacific region in H1’21,
Pacific region, with many working to build their breadth, reach and market share. with the ‘buy now, pay later’ space considered to be one of the fastest-growing
Indonesia-based Gojek raised $300 million in H1’21, while also announcing a merger subsectors.
with eCommerce platform Tokopedia for $18 billion to create GoTo Group.
Unbanked and underbanked seen as tremendous opportunity
Jurisdictions taking very different approaches to crypto Investors continue to see significant opportunities across the Asia-Pacific region to
Across the Asia-Pacific region, jurisdictions continued to take very different better reach unbanked and underbanked. In India, for example, a number of fintech
approaches to cryptocurrencies and crypto exchanges. In H1’21, China banned banks unicorns are working to become the core player between an individual and banking,
from providing cryptocurrency-related services,42 whereas Hong Kong’s Financial insurance, or wealth management offerings.
Services and the Treasury Bureau recommended all virtual asset exchanges in Hong
Kong (SAR, China) be licensed and limited with professional investors. Trends to watch for in H2’21
— A major increase in investment in H2’21, driven by the anticipated closure of
Interest in SPACs increasing Grab’s SPAC merger and Gojek’s merger with Tokopedia
Given the explosion of US-based SPACs in recent quarters, startups — including
— US SPACs looking for targets in the Asia-Pacific region
mature fintechs — in the Asia-Pacific region are expected to gain more interest from
US-based SPACs looking to make deals. During H1’21, Singapore-based super app — increasing investment in insurtech, wealthtech, and B2B services
company Grab announced the largest SPAC merger ever: a $40 billion deal with US- — big techs and platform providers continuing to expand into or across financial
based Altimeter Growth Corp, which is expected to be finalized in H2’21.43 services.
42 https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.
43 https://www.cnn.com/2021/04/13/investing/grab-altimeter-us-spac-ipo-intl-hnk/index.html
#fintechpulse
57

Investment levels on pace to normalize along approximate tallies from 2020
Total investment activity (VC, PE and M&A) in fintech in Asia Pacific Venture activity in fintech in Asia Pacific
2018–2021* 2018–2021*
$50 1,200 $40 1,000
1,050 937
$40 1,000
815 733 800
$30 640
714 800
$30 600
600 $20
$20 467 430 400
400
$10 $7.5 $10 $6.5
200 200
$38.2 $24.6 $13.4 $32.4 $13.6 $10.6
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
M&A activity in fintech in Asia Pacific PE growth activity in fintech in Asia Pacific
2018–2021* 2018–2021*
$12 93 100 $2,500 25
20
$10 80 $2,000 17 17 20
65
$8 57
60 $1,500 15
$6
40 $1,000 10 10
$4
$1.7 27
$2 20 $500 5
$3.8 $9.9 $0.3 $2,002.0 $1,104.4 $1,056.5 $682.7
$0 0 $0 0
2018 2019 2020 2021* 2018 2019 2020 2021*
#fintechpulse
58

Relative to historical trends, venture deal sizes remain subdued
VC activity in fintech with corporate participation in Asia Pacific Interestingly, the late-stage financing size has declined over the past few years, with a
2018–2021*
slight tick upward in 2021’s first half to reach $20.0 million. What this likely suggests,
$30 350
291 when analyzed in concert with the trends in financing sizes at earlier stages, is that the
$25 300
250 228
250
degree of competition has grown more mild over the past several years, given that
$20
200 global dry powder figures remain quite elevated. Investors are still willing to broker
$15 161 deals at strong valuations for companies, but not to quite the same extent they did in
150
$10 the past. Part of that is due also to declining corporate participation in the ecosystem,
100
$5 $2.8 50 at least at the yearly level thus far, in terms of aggregate deal value in which corporate
$24.9 $10.3 $7.6
$0 0 players participate. Long key to the ASPAC fintech ecosystem, corporates and their
2018 2019 2020 2021* venture arms have pulled back somewhat in terms of financing participation when it
comes to fintech, given the degree of consolidation and emergence of clear category
leaders across countries and even regions.
Median venture deal sizes ($M) by stage in fintech in Asia Pacific
2018–2021*
$27.0
$23.5
$20.0
$16.4
$7.7
$6.2 $7.0 $6.0
$1.2 $1.2 $1.4 $1.9
2018 2019 2020 2021*

Angel & seed Early VC Later VC
#fintechpulse
59

Deal-making ticks back upward after subdued period
Total investment activity (VC, PE and M&A) in fintech in Asia Pacific M&A in fintech in Asia Pacific
2018–2021* 2018–2021*
$18 350 $4 30
$16
288 300 $3
292 25 25
$14 23 23
258 250 22
$3
$12 231 236 20
214
217
205 18
$10 212 180 200 $2 16 16
182 16
179 175 15 15 15 15
177
$8 150 13 14
M&A activity in fintech in Asia Pacific $2
2018–2021* 11
$6 10
100 $1
$4
5
50 $1
$0.2
$0.2
$0.2
$2
$0.1
$17.0
$0.1
$8.9
$5.0
$7.4
$4.5
$5.0
$5.7
$9.4
$6.2
$2.4
$1.9
$2.9
$2.8
$4.7
$0.6
$2.0
$1.0
$2.5
$3.2
$3.2
$1.0
$0.5
$1.0
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
#fintechpulse
60

Venture financing volume resurges, borne by increased corporate participation
Venture activity in fintech in Asia Pacific VC activity in fintech with corporate participation in Asia Pacific
2018–2021* 2018–2021*
$18 300 $18 100

93 89
$16 266 $16 90
254
250
80
$14 233 $14 75 77
215
215 72
70
$12 198 200 $12 66 67 66
194
184 181 60
162 165 58 58
$10 $10 57 55
160 159 154 150 50
48 49
$8
M&A activity in fintech in Asia Pacific $8
2018–2021* 40
$6 100 $6
30
$4 $4
20
50
$1.8
$1.4
$1.4
$2
$1.1
$1.0
$1.0
$1.1
$2
$0.9
10
$0.7
$16.3
$15.3
$8.6
$2.8
$2.0
$8.3
$5.3
$2.0
$3.8
$2.7
$1.8
$4.8
$6.1
$2.1
$7.6
$4.3
$1.6
$1.5
$1.7
$0 0 $0 0
2018 2019 2020 2021 2018 2019 2020 2021
Deal value ($B) Deal count Angel & seed Early VC Later VC
#fintechpulse
61
Regional insights — ASPAC: Mainland China and Hong Kong (SAR)
“
China attracts $1.3 billion in fintech investment in best result since H2’19 China’s fintech market is incredibly
— Fintech investment in China increased from $900 million in H2’20 to over Total fintech investment activity (VC, PE and M&A) in mature next to many other jurisdictions,
$1.3 billion in H1’21. mainland China 2018–2021* with investments in areas like payments
$18,000 160 really taking off a few years ago and a
— China did not see any mega VC deals in H1’21, however, the $100 million+ VC
133 134 number of clear leaders emerging. Now
deals that occurred highlight the growing diversity of fintech startups attracting $16,000
136
140
what we’re seeing isn’t megadeals in
funding. In H1’21, medical payments company MediTrust Health raised $155 $14,000
120
those very mature areas, but rather an
million, wealthtech WeBull raised $150 million, asset data management firm $12,000
100 increasing number of smaller deals
Xuncetech raised $108 million, and B2B solutions provider XforcePlus raised $10,000
85 80 focused on less mature sectors of
$100 million. $8,000 76
64
”
fintech — like B2B services, wealthtech,
$3,936.8
65
$3,299.9
60
$2,760.6
— While tightening controls over crypto, China also expanded its central bank digital $6,000 61 52
49 46 and insuretech.
$15,664.9
34 43 40
currency pilot project in H1’21 to include some salary payments in the Xiong’an $4,000
$5,121.3
$706.9
$576.8
$947.0
$432.9
$538.6
$226.8
$673.0
$652.9
$700.4
New Area,44 subway fare payments in Beijing,45 and exchanges between digital $2,000 20 Andrew Huang
Partner and Fintech Leader,
and physical currencies at two Beijing-based banks.46 $0 0 KPMG China
“
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
— In H1’21, financial regulators in China ordered a number of platform companies 2018 2019 2020 2021
with financial services offerings to enhance their regulatory compliance.47 Deal value ($M) Deal count
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data Hong Kong (SAR, China) has
provided by PitchBook), *as of 30 June 2021.
become a center and talent pool for
Hong Kong (SAR, China) set to adjust virtual asset exchange licensing rules blockchain and crypto in Asia. It’s an
incredibly hot space for investment —
— The introduction of digital bank licenses has caused some of the more established banks in Hong Kong (SAR, China) to up their game in terms of
and I expect to see significant M&A
the user interface that they offer and the value propositions and how they go to market.
activity as CeFi players look to
— Cryptocurrencies and crypto exchanges continued to attract attention in Hong Kong (SAR, China), with raises by Amber Group ($100 million) and acquisitions to expand capabilities,
Babel Finance ($40 million) in H1’21. Hong Kong (SAR, China) has also seen increasing interest in the entire blockchain ecosystem from VC funds and investors seek to tap into one of
and family offices.
”
the most exciting and fastest growing
— While licensing of crypto exchanges is currently ‘opt-in’ based, during H1’21, the Hong Kong Financial Services and the Treasury Bureau found that all asset classes.
virtual asset exchanges should be licensed with services restricted to professional investors. Regulations to enact these rules are expected over the next Barnaby Robson
year. This could affect crypto investments over the medium term and also Hong Kong’s (SAR, China) status as a center for blockchain in Asia.48 Partner, Deal Advisory,
44 https://www.coindesk.com/china-cbdc-wage-pilot
KPMG China
45 https://bitcoinist.com/after-chasing-off-bitcoin-miners-china-launches-new-test-for-digital-yuan/ 47 https://www.cnbc.com/2021/04/14/chinese-tech-stocks-rally-after-regulatory-compliance-pledge.html
46 https://www.pymnts.com/cryptocurrency/2021/china-owned-commercial-bank-allows-digital-yuan-to-cash-conversions-at-atms/ 48 https://www.reuters.com/technology/hong-kong-restrict-crypto-exchanges-professional-investors-2021-05-21/
#fintechpulse
62
Regional insights — ASPAC: Australia

Australia off to a solid start with almost $900 million in fintech investment
“
— Australia saw a solid start to the year, with $890 million Total investment activity (VC, PE and M&A) in fintech in Australia
2018–2021* There’s a lot happening in
in fintech investment in H1’21, including National
$1,400 25 the fintech sector in
Australia Bank’s $170 million acquisition of digital bank
23 Australia — between
86 400 and $100 million raises by payments firm 21
$1,200 21
21
21 payments, digital banking,
Airwallex and green energy focused POS credit and 20
19 20 20 and banking-as-a-service
sales provider Brighte. 19
$1,000 solutions. Corporates were
— In addition to open banking, digital banking, payments, 16 very active in H1’21,
15
and B2B services, Australia saw rising interest in the $800 14 14 focusing on building out
digital mortgage space; in H1’21, Athena Home Loans their capabilities and their
12 12
raised $90 million. $600 offerings in order to provide
10
— Interest in banking-as-a-service solutions continued to a broader range of
grow in Australia. In H1’21, incumbent bank Westpac $400 solutions to their clients,
particularly SMEs and
$170.6
$158.0
kept moving forward with its development of a BaaS 5
$101.4
merchants.
$1,187.9
$1,047.0
model in partnership with UK-based fintech 10x, $200
$224.7
$233.5
$378.9
$636.9
$431.9
$377.0
$396.6
$323.0
$562.9
announcing a partnership with ID-focused regtech Ian Pollari
FrankieOne to facilitate seamless onboarding.49 $0 0 Global Co-Leader of Fintech,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Partner and National Banking Leader,
— Several of Australia’s big banks have focused on KPMG Australia
2018 2019 2020 2021
investing in ecosystem and vertical players in order to Deal value ($M) Deal count
simplify and enhance the experience of SMEs and
merchants; during H1’21, Commonwealth Bank Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of
30 June 2021.
invested $20 million in Amber Energy as part of a

partnership to provide access to wholesale energy
process to its customers.50
49 https://www.afr.com/companies/financial-services/westpac-expands-banking-as-a-service-diverging-from-cba-strategy-20210326-p57eau
50 https://reneweconomy.com.au/energy-retail-upstart-amber-gains-new-funds-and-customer-base-in-cba-deal/
#fintechpulse
63
Regional insights — ASPAC: Singapore
Grab announces $40 billion SPAC merger in Singapore
“
— Fintech investment dropped somewhat in Total fintech investment activity (VC, PE and M&A) in Singapore
Singapore, from $930 million in H2’20 to 2018–2021* It is all about platforms here
$614 million in H1’21; eWallet company in South East Asia targeting
$6,000 45
Matchmove raised $100 million in inclusion, sustainability,
Singapore’s largest deal of the quarter. 40 40 e-commerce and efficient
$5,000 access to finance. Through
— During H1’21, platform giant Grab this we are seeing the
33 35
announcing a $40 billion SPAC merger — beginning of a redrawing of
31 32 31 32
setting the stage for a big end to the year. $4,000 30 30 Financial Services,
29
28
— The four digital banks that received licenses 26 supported by the opening up
25
in Singapore were quiet in H1’21, focusing on 24 of data by regulators, central
$3,000 22
building out their operations and products; banks and the cloud
”
20
Singapore’s incumbent banks also focused 19 19 providers.
significantly on their digital products and $2,000 15 Anton Ruddenklau
value propositions. Global Co-Leader of Fintech,
10 Partner and Head of Financial Services
— During H1’21, the Green Finance Industry
$593.9
Advisory,
$331.1
$1,000
$343.7
$286.2
$254.5
$2,543.0
$5,014.7
$283.1
$1,021.4
KPMG in Singapore
$170.4
Taskforce of the Monetary Authority of
$153.7
$198.0
$134.5
$168.1
5
Singapore announced a number of initiatives
focused on accelerating green finance, $0 0
including issuing a guide for climate-related Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
disclosures, a framework for green trade 2018 2019 2020 2021
finance, and recommendations and a Deal value ($M) Deal count
roadmap to scale green finance in a number
of key sectors.51
51 https://www.mas.gov.sg/news/media-releases/2021/accelerating-green-finance
#fintechpulse
64
Regional insights — ASPAC: India

Big start to 2021 as India attracts over $2 billion in fintech investment
“
— India almost matched its total fintech investment in 2020, with Total fintech investment activity (VC, PE and M&A) in India
2018–2021* Exits in India are going to
$2 billion in investment in H1’21, including merchant platform
$2,500 80 increase, both in terms of
Pine Labs’ $285 million PE funding round and $100 million+
IPOs and in terms of
VC funding rounds by Cred ($215 million), RazorPay ($160
70
acquisitions. On the M&A
million), KreditBee ($153 million), OfBusiness ($110 million), 68
front, fintechs could be
and BharatPe ($108 million). $2,000 targeted by banks, larger
60
— Digital banking was a big play in India, but with a unique fintechs or even a fintech
model compared to other jurisdictions in the regions — with 53
55 services conglomerate. Over
digital banks acting primarily as SaaS providers and $1,500 45
50 the next 12 months, we
44 44
regulatory responsibility remaining with bank partners. 45 45 46 expect leading fintech
— Early fintech leaders in India have continued to expand their 40 41 40 unicorns trying to tap into the
business models into adjacencies in order to bring their 35 35 strong capital market by
customers more value, such as payments players acquiring
$1,000
30
looking at an IPO. Banks are
insurtechs. 27 also keen to partner with
Fintechs especially Neo
— Insurtech is a growing area of interest for investors in India; in 20
Banks and Wealthtech
”
H1’21, several insurtechs raised mid-sized VC or PE funding $500
platforms.
$179.8
rounds, including Turtlemint ($46 million), RenewBuy ($45
$2,014.2
$1,182.6
$1,402.8
10
$434.5
$647.3
$756.8
$371.6
$335.4
$536.8
$701.4
$461.2
$430.0
$652.2
million), and Digit Insurance ($18 million). Sanjay Doshi
Partner and Head of Financial
$0 0 Services Advisory,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 KPMG in India
2018 2019 2020 2021
Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by
PitchBook), *as of 30 June 2021.
#fintechpulse
65
Asia Pacific
Top 10Top 10 fifinntech
global techdeal
dealssininAsi
2020a Pacific in H1 2021
1
9 1. Toss (Financial Software) — $410M, Seoul, South Korea — Payments/transactions —
3 Later VC
4 2. Gojek — $300M, Jakarta, Indonesia — Payments/transactions — Later VC
5
8
10 7 3. Pine Labs — $285M, Noida, India — Payments/transactions — PE growth
4. CRED (Financial Software) — $215M, Mumbai, India — Payments/
2
transactions — Series D
5. Mynt — $175M, Taguig, Philippines — Payments/transactions — Later VC
6. 86 400 — $170.3M, Sydney, Australia — Banking — M&A
7. Voyager Innovations — $167M, Mandaluyong City, Philippines —
6 Payments/transactions — PE growth
8. Razorpay — $160M, Bengaluru, India — Payments/transactions — Series E
9. MediTrust Health — $154.6M, Shanghai, China — Payments, insurtech — Series B
10. KreditBee — $153M, Bengaluru, India — Lending — Series C
#fintechpulse
66
Global insights | Fintech segments | Featured interview | Spotlight article | Regional insights
About us
KPMG’s Global Fintech practice
The financial services industry is transforming with
the emergence of innovative new products,
channels and business models. This wave of
change is driven primarily by evolving customer
expectations, digitalization as well as continued
regulatory and cost pressures.
KPMG firms are passionate about supporting clients

to successfully navigate this transformation,
mitigating the threats and capitalizing on the
opportunities.
KPMG Fintech professionals include partners and

staff in over 50 fintech hubs around the world,
working closely with financial institutions and fintech
companies to help them understand the signals of
change, identify the growth opportunities and to
develop and execute their strategic plans.
Visit home.kpmg/fintech
#fintechpulse
67
Contacts
Get in touch with us
Ian Pollari John Armstrong
Global Co-Leader of Fintech, Partner and National Industry Leader, Financial Services,
Partner and National Banking Leader, KPMG Australia KPMG in Canada
E: ipollari@kpmg.com.au E: johnarmstrong@kpmg.ca
Anton Ruddenklau Stéphane Dehaies, Associate Partner, Management Consulting, FSI

Global Co-Leader of Fintech, KPMG in the UK
Partner and Head of Financial Services Advisory, E: stephane.dehaies@kpmg.co.uk
KPMG in Singapore
E: antonyruddenklau@kpmg.com.sg Andrew Huang
Partner and Fintech Leader, KPMG China
Chris Hadorn E: andrew.huang@kpmg.com
Global Head of Payments,
Principal, Financial Services, KPMG in the US Anna Scally
E: chrishadorn@kpmg.com Partner and Fintech Leader, KPMG in Ireland
E: anna.scally@kpmg.ie
John Hallsworth
Partner, Open Banking Lead, Ilanit Adesman
KPMG in the UK Partner, Financial Risk Management, KPMG in Israel
E:john.hallsworth@kpmg.co.uk E: iadesman@kpmg.com
Fabiano Gobbo Gary Chia

Global Head of Regtech, Partner and ASEAN Financial Services Regulatory and Compliance
Partner, Risk Consulting, KPMG in Italy Practice Leader, KPMG in Singapore
E: fgobbo@kpmg.it E: garydanielchia@kpmg.com.sg
Gary Plotkin Bob Ruark

Global Insurtech Leader, Principal, Financial Services Strategy and Fintech Leader,
Principal and Insurance Management Consulting Leader, KPMG in the US
KPMG in the US E: rruark@kpmg.com
E: gplotkin@kpmg.com
#fintechpulse
68
About the report

Acknowledgements
We acknowledge the contribution of the following individuals across KPMG member firms who assisted in the development of this publication:
— Ian Pollari, Global Co-Leader of Fintech, Partner and National Banking Sector
Leader, KPMG Australia
— Andrew Huang, Partner and Fintech Leader, KPMG China
— Anton Ruddenklau, Global Co-Leader of Fintech, Partner and Head of Financial
— Charles Jacco, Americas Cyber Security Services, Financial Services Leader
Services Advisory, KPMG in Singapore
and Principal, KPMG in the US
— Ilanit Adesman, Partner, Financial Services Risk Management and Insurtech
— Pat Kneeland, Manager, Innovation & Enterprise Solutions, KPMG in the US
Lead, KPMG in Israel
— Bernd Oppold, Partner, KPMG in Germany
— John Armstrong, Partner and National Industry Leader, Financial Services,
KPMG in Canada — Bill Packman, Partner and Wealth Management Consulting Lead, KPMG in the
UK
— Spencer Burness, Director, Advisory Services, KPMG in the US
— Laszlo Peter, Head of Blockchain Services, Asia Pacific, KPMG Australia
— Gary Chia, Partner and ASEAN Financial Services Regulatory and Compliance
Practice Leader, KPMG in Singapore — Gary Plotkin, Global Insurtech Leader, Principal and Insurance Management
Consulting Leader, KPMG in the US
— Stéphane Dehaies, Partner, Financial Services Management Consulting, KPMG
in the UK — Barnaby Robson, Partner, Deal Advisory, KPMG China
— Sanjay Doshi, Partner and Head of Financial Services Advisory, KPMG in India — Robert Ruark, Principal, Financial Services Strategy and Fintech Leader, KPMG
in the US
— Martin Ekstedt, Partner, Corporate Finance, KPMG in Sweden
— Anna Scally, Partner and Fintech Leader, KPMG in Ireland
— Fabiano Gobbo, Global Head of Regtech, Risk Consulting Partner, KPMG in
Italy — Ovais Shahab, Head of Financial Services, KPMG in Saudi Arabia
— Chris Hadorn, Global Head of Payments, Principal, Financial Services, KPMG in — Gonçalo Traquina, Partner, Advisory KPMG in the Lower Gulf region
the US
— John Hallsworth, Partner, Open Banking Lead, KPMG in the UK
#fintechpulse
69
About the report

Methodology
The underlying data and analysis for this report (the “Dataset”) was provided by PitchBook Data, Inc the investors and/or press release state that a round is a seed financing, or it is for less than $500,000 and is
(“PitchBook”) on 7 July 2021 and utilizes their research and classification methodology for transactions as the first round as reported by a government filing, it is classified as such. If angels are the only investors, then a
outlined on their website at https://help.pitchbook.com/s/. The Dataset used for this report considers the round is only marked as seed if it is explicitly stated.
following investment transactions types: Venture Capital (including corporate venture capital) (“VC”), private
Early-stage VC: Rounds are generally classified as Series A or B (which PitchBook typically aggregates
equity (“PE”) Investment and Mergers and Acquisitions (“M&A”) for the FinTech vertical within the underlying
together as early stage) either by the series of stock issued in the financing or, if that information is unavailable,
PitchBook data. Family and friends, incubator and accelerator type funding rounds are excluded from the
by a series of factors including: the age of the company, prior financing history, company status, participating
Dataset.
investors and more.
Due to the private nature of many of the transactions, the Dataset cannot be definitive, but is an estimate
Late-stage VC: Rounds are generally classified as Series C or D or later (which PitchBook typically
based on industry leading practice research methodology and information available to PitchBook at 7 July
aggregates together as late stage) either by the series of stock issued in the financing or, if that information is
2021. Similarly, due to ongoing updates to PitchBook’s data as additional information comes to light, data
unavailable, by a series of factors including: the age of the company, prior financing history, company status,
extracted before or after that date may differ from the data within the Dataset.
participating investors, and more.
Only completed transactions regardless of type are included in the Dataset, with deal values for general M&A
Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both
transactions as well as venture rounds remaining un-estimated if this information is not available or reliably
firms investing via established CVC arms or corporations making equity investments off balance sheets or
estimated.
whatever other non-CVC method actually employed.
Venture capital deals Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other
PitchBook includes equity investments into startup companies from an outside source. Investment does not PitchBook venture financings are included in the Pulse of Fintech as of March 2018.
necessarily have to be taken from an institutional investor. This can include investment from individual angel
Private equity investments
investors, angel groups, seed funds, venture capital firms, corporate venture firms and corporate investors.
Investments received as part of an accelerator program are not included, however, if the accelerator continues PitchBook includes both buyout investors, being those that specialize in purchasing mainly a controlling interest
to invest in follow-on rounds, those further financings are included. of an established company (in a leveraged buyout) and growth/expansion investors, being those that focus on
investing in minority stakes in already established businesses to fund growth. Transaction types include:
Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the
leveraged buyout (“LBO”; management buyout; management buy-In; add-on acquisitions aligned to existing
company to date and it cannot determine if any PE or VC firms are participating. In addition, if there is a press
investments; secondary buyout; public to private; privatization; corporate divestitures; and growth/expansion.
release that states the round is an angel round, it is classified as such. Finally, if a news story or press release
only mentions individuals making investments in a financing, it is also classified as angel. As for seed, when
#fintechpulse
70
About the report

Methodology (cont’d)
M&A transactions 3. Lending — any non-bank who uses a technology platform to lend money often implementing
alternative data and analytics OR any company whose primary business involves providing data and
PitchBook defines M&A as a transaction in which one company purchases a controlling stake in another
analytics to online lenders or investors in online loans.
company. Eligible transaction types include control acquisitions, leveraged buyouts (LBOs), corporate
divestitures, reverse mergers, mergers of equals, spin-offs, asset divestitures and asset acquisitions. Debt 4. Proptech — companies that are classified as both fintech AND also who are developing and
restructurings or any other liquidity, self-tender or internal reorganizations are not included. More than leveraging technology intended to help facilitate the purchase, management, maintenance and
50 percent of the company must be acquired in the transaction. Minority stake transactions (less than a investment into both residential and commercial real estate. This includes sub-sectors such as
50-percent stake) are not included. Small business transactions are not included in this report. property management software, IoT home devices, property listing and rental services, mortgage and
lending applications, data analysis tools, virtual reality modeling software, augmented reality design
The fintech vertical applications, marketplaces, mortgage technology and crowdfunding websites.
A portmanteau of finance and technology, the term refers to businesses who are using technology to operate 5. Insurtech — companies utilizing technology to increase the speed, efficiency, accuracy and
outside of traditional financial services business models to change how financial services are offered. Fintech convenience of processes across the insurance value chain. This includes quote comparison
also includes firms that use technology to improve the competitive advantage of traditional financial services websites, insurance telematics, insurance domotics (home automation), peer-to-peer insurance,
firms and the financial functions and behaviors of consumers and enterprises alike. PitchBook defines the corporate platforms, online brokers, cyber insurance, underwriting software, claims software and
FinTech vertical as “Companies using new technologies including the internet, blockchain, software and digital sales enabling.
algorithms to offer or facilitate financial services usually offered by traditional banks including loans, payments,
wealth or investment management, as well as software providers automating financial processes or addressing 6. Wealthtech — companies or platforms whose primary business involves the offering of wealth
core business needs of financial firms. Includes makers of ATM machines, electronic trading portals and management services using technology to increase efficiency, lower fees or provide differentiated
point-of-sale software.” Within this report, we have defined a number of Fintech sub-verticals: offerings compared to the traditional business model. Also includes technology platforms for retail
investors to share ideas and insights both via quantitative and qualitative research.
1. Payments/Transactions — companies whose business model revolves around using technology to
provide the transfer of value as a service including both B2B and B2C transfers. 7. Regtech — companies who provide a technology-driven service to facilitate and streamline
compliance with regulations and reporting as well as protect from employee and customer fraud.
2. Blockchain/Cryptocurrency — companies whose core business is predicated on distributed ledger
(blockchain) technology with the financial services industry AND/OR relating to any use case of
cryptocurrency (e.g. Bitcoin). This vertical includes companies providing services or developing technology
related to the exchange of cryptocurrency, the storage of cryptocurrency, the facilitation of payments using
cryptocurrency and securing cryptocurrency ledgers via mining activities.
#fintechpulse
71
home.kpmg/fintech
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to
provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in
the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal
entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please
visit home.kpmg/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.

Pulse of Fintech 1H21 - KPMG

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pulse of Fintech 1H21 - KPMG

Uploaded by

Copyright:

Available Formats

Pulse of Fintech

Global fintech investments in H1 2021 recorded

$98B with 2,456 deals

Global fintech investment reaches $98 billion at mid-year

Top fintech trends for 2021

3. SPACs could steal the spotlight

Global M&A activity in fintech Global PE growth activity in fintech

Late-stage venture valuations more than double year-over-year

Q2 dip belies the massive push into fintech funding

$160 1,400 $160 250

2018 2019 2020 2021 2018 2019 2020 2021

Momentum carries over between quarters for record first half

$35 1,200 $20 350

Top 10Top 10 global fintech deals in H1 2021

1. Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A

$40 200 Embedded finance diversifying payments space

The payments space is diversifying beyond person-to-person and bill payments,

$15 Different regions seeing insurtech funding grow

Cybersecurity investment on a record pace

$3.0 53 Big start to the year for cybersecurity investment

Wealthtech a big hit with VC investors in H1’21

Investment offerings maturing

$9 887 900 Evolving nature of investors

Featured interview: Ant Group

In H1 2021, fintech investment in the Americas reached

$51.4B with 1,188 deals

Regional insights — Americas

Regional insights — Americas

Regional insights — Americas

Regional insights — Americas

$90 700 $90 120

$80 620 $80 107

Regional insights — Americas

Regional insights — Americas: Canada

Deal value ($M) Deal count

Regional insights — Americas: United States

1. Robinhood — $3.4B, Menlo Park, US — Wealth/investment management

In 2021, investment in fintech companies in Europe,

$39.1B with 792 deals

Regional insights — EMEA

Digital banks continue to draw attention Trends to watch for in H2’21

Regional insights — EMEA

M&A activity in fintech in EMEA PE growth activity in fintech in EMEA

Regional insights — EMEA

Regional insights — EMEA

$60 450 $60 80

Regional insights — EMEA

$10 350 $3,000 100

Regional insights — EMEA: United Kingdom

financial inclusion, carbon tracking and offsets.

Regional insights — EMEA: Germany

Regional insights — EMEA: France

Regional insights — EMEA: Nordics / Sweden

small companies with good technologies behind them.

Regional insights — EMEA: Ireland

Regional insights — EMEA: Saudi Arabia

Deal value ($M) Deal count

Regional insights — EMEA: Israel

Deal value ($M) Deal count

In H1 2021, fintech companies in Asia Pacific received

$7.5B with 467 deals

Regional insights — ASPAC

Regional insights — ASPAC

Regional insights — ASPAC