Fintech investment in EMEA region drops significantly in 2022: report

TDT | Manama                                        

The Daily Tribune – www.newsofbahrain.com   

Investment in the Fintech sector in the Europe, Middle East, and Africa (EMEA) region experienced a significant decline last year, despite the year being the third best globally for Fintech investment ever and second strongest for deal value, according to a report.

As per Pulse of Fintech H2’22 published by KPMG, Investment in the Fintech sector in EMEA region dropped from US$79 billion across 2,379 deals in 2021 to US$44.9 billion across 1,977 deals in 2022.

The lack of high-value deals worth over US$1 billion in H2’22 contributed to the significant drop-off.

While H1’22 saw eight M&A transactions and two VC raises, H2’22 saw just three M&A deals over US$1 billion, leading to a rapidly changing market condition.

Despite being the third best year, Global fintech investment also fell from a record US$238.9 billion across 7,321 deals in 2021 to US$164.1 billion across 6,006 deals in 2022.

In addition, investment in crypto and blockchain declined from US$30 billion in 2021 to US$23.1 billion in 2022 due to a plummeting of investor sentiment in the consumer crypto space and crypto exchanges.

The report said Investors are now looking towards broader blockchain-based solutions and value propositions, leading to potentially more diversified investments in the blockchain sector in 2023.

As per Manav Prakash, Advisory Partner at KPMG in Bahrain, the challenging market conditions are unlikely to ease as we move into H1’23, leading to subdued fintech investment, although some fintech sub-sectors are expected to be more resilient than others.