The Europe, Middle East and Africa (EMEA) region saw $39.1 billion in fintech investment in the first half of this year, including a record $15.1bn in venture capital funding.
In the UAE, in particular, international interest has continued to grow, with both Ireland-based regtech company DX Compliance and US-based payments firm Stripe launching operations in the country in the opening six months of 2021.
“Accelerators and events are an important part of building up the fintech ecosystem in the UAE. The first half saw some interesting developments in this area. The Ministry of Economy and the Securities and Commodities Authority launched a Fintech Megathon to help reimagine financial services in the UAE. UAE technology ecosystem Hub 71 and US based Modus Capital also launched Ventures Lab – a program aimed at helping early stage founders build viable products,” said Goncalo Traquina, partner at KPMG Lower Gulf.
Globally, fintech investment hit $98bn in the first half of 2021, compared with $121.5bn during the entirety of 2020, new research from KPMG shows.
Looking toward the next six months, “total fintech investment is expected to remain very robust in most regions of the world. While the payments space is expected to remain a dominant driver of fintech investment, revenue-based financing solutions, banking-as-a-service models, and B2B services are expected to attract increasing levels of investment,” the KMPG report said, adding cybersecurity solutions will likely also be on investors’ radar.
Global investment in cybersecurity reached a new annual record at mid-year, rising from $2.2bn in 2020 to over $3.7bn.
However, even with the focus on cybersecurity, fintech remains the primary basket for investment, with private equity firms contributing $5bn in the first half of 2021.
Globally, there was an explosion of unicorn births, with 163 created in the first half of the year, according to the consultancy giant.
“Under pressure to increase the velocity of their digital transformation and to enhance their digital capabilities, corporates were particularly active in venture deals, participating in close to $21bn in investment over nearly 600 deals globally, with many realising it’s quicker to do so by partnering with, investing in, or acquiring fintechs,” the report said.
Separately, cross-border merger and acquisition deal value rose dramatically, from $10.3bn during all of 2020 to $27.7bn in the first half of 2021 alone.
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