KPMG: Global fintech investment hits $98bn in H1

Global fintech investments have seen a remarkable rebound in the first half of this year, surging to $98 billion from $87 billion in 2020. The diversity in investment trends has been a key observation in the fintech space, reflecting a wide range of services that investors are focusing on. Boye Ademola, Partner and Head of Operations and IT Enablement at KPMG Nigeria, highlighted the growth agenda focused on underbanked, uninsured, and invested segments, along with investments cutting across traditional payments, lending, cryptocurrency, challenger banks, and B2B services. This diversity presents a compelling story of innovation and growth in the fintech sector. The trend of big tech companies, led by Google, making equity investments and driving strong partnership agendas with incumbents and banks signifies a shift in the industry dynamics. Incumbent banks are also venturing into VC funds to reinvent themselves and actively participate in the fintech evolution by investing in defining areas for fintechs. However, the African fintech market is experiencing a mix of fortunes in 2021. While 2020 witnessed significant investments in prominent African fintech firms like Fawry, Paystack, and Interswitch, the first half of 2021 has been relatively quiet with smaller investment rounds. This shift is expected to change with recent developments such as the $400 million investment by Japanese billionaire Son in OPay, valuing the firm at $2 billion and making it one of Africa's fintech unicorns. Despite the mixed investment landscape, the focus on financial inclusion remains crucial for African fintech firms. Addressing challenges such as fraud, regulation, and low insurance penetration will be vital for these firms to scale and attract the necessary capital. Regulators also play a pivotal role in creating an environment conducive for fintech growth by harmonizing regulations and fostering a conducive investment climate. Analysts emphasize that Africa is the next investment frontier for fintech, with opportunities for scalable business models that can drive returns for investors. The potential for fintech firms in Africa to tap into emerging markets and deliver impactful financial services is becoming increasingly evident, as seen in recent investments in OPay and other African fintech players.