Global fintech investment falls to US$51.9bn but deal volume offers optimism

The first six months of 2024 were challenging for the fintech market globally, according to KPMG’s Pulse of Fintech, amid the high interest rate environment and significant global geopolitical uncertainty. 

Total global fintech investment – including venture capital (VC), private equity (PE), and M&A deal value – fell from US$62.3bn across 2,287 deals in the second half of 2023 to US$51.9bn across 2,255 deals in the first half of 2024. VC investment declined in all key regions, while the US and ASPAC saw modest declines between H2’23 and H1’24 – from US$38.5bn to US$36.7bn in the Americas and from US$4.6bn to US$3.8bn in ASPAC – the EMEA region saw a more significant drop from US$19.1bn to US$11.4bn.

The decline in deal value was partly due to the decrease in large deals, as fintech investors showed significant caution with their investments. According to the H1’24 edition of the KPMG report, during those six months, only five fintech deals of US$1bn or more occurred globally, including the buyouts of US-based Worldpay for US$12.5bn, Canada-based Nuvei for US$6.3bn, US-based EngageSmart for US$4bn, UK-based IRIS Software Group for US$4bn, and Canada-based Plusgrade for US$1bn. The largest VC deal globally in the fintech space was a US$999 million raise by UK-based Abound.

Despite the decline in total investment, regional deal volume hinted at optimism. While deal volume globally dipped slightly, the decline was driven entirely by a decline in deal volume in EMEA – from 804 in the second half of 2023 to 689 in the first half of 2024. Comparatively, the Americas saw deal volume rise from 1,066 to 1,123, while ASPAC rose from 406 to 438.

Mirroring a trend seen globally, AI was quite hot in the eyes of fintech investors in the first half of 2024, particularly in the Americas. The US, in particular, saw four large AI-focused deals: cyber insurance company Corvus was acquired by Travellers for US$427m, Salesforce acquired compensation-focused platform Spiff for US$419m, corporate management company Ramp raised a US$150m VC round, and investment management platform FundGuard raised a US$100m VC funding round. China-based AI-powered sustainability data company MioTech also raised a US$150m VC round in the first half of 2024.

After a very quiet year of investment in 2023, both the payments sector and the regtech sector saw VC investment rebound quite solidly in the first half of 2024. The payments space attracted US$21.4bn in investment during the first six months of the year, compared to the US$22.7bn seen during all of 2023, while regtech attracted US$5.3bn in investment, compared to just US$3.4bn during all of 2023. Meanwhile, insurtech investment dried up significantly, attracting US$1.6bn. This was less than one-quarter of the US$8.2bn seen in 2023.

 

UK and Poland target green exports with €249m financing for solar project

UK Export Finance (UKEF) and KUKE, the UK and Polish export credit agencies, have guaranteed a €249m loan being arranged by Standard Chartered Bank for Turkish renewable energy investment company Kalyon Enerji, enabling the construction of Turkey’s second-largest solar project to date. This deal is expected to support UK jobs in the renewable-energy sector supply chain, particularly in the Midlands.

The 390MWp project entails the construction and operation of solar power plants at seven separate sites, with an aggregate power generating capacity of 390 MWp across the provinces of Bor-Nigde, Gaziantep and Sanliurfa-Viransehir. Upon completion, the project could generate enough renewable electricity to power over 65,000 households in Turkey annually.

British exporter GE Vernova – via its subsidiary UK Grid Solutions Ltd – will supply and install inverter stations, power-plant controllers, and other critical equipment. This is expected to support British jobs at GE Vernova’s Staffordshire site directly, as well as jobs in the wider UK supply chain.

Polish exporters will deliver the project's security systems (including both software and equipment) and steel components. This is set to create jobs in the manufacturing and logistics sectors.

Standard Chartered acted as Structuring Bank, Green Loan Coordinator, Lead Arranger and Lender. The financing is guaranteed by a 100% UKEF guarantee, with over €122m reinsured by KUKE, Poland’s export credit agency.

Renewable energy represents 54% of the total installed electricity capacity in Turkey. This new project will increase the availability of renewable energy in Turkey and deliver on UKEF’s commitment to supporting the global transition towards low-carbon economies.

 

Australia’s Confirmation of Payee service hits milestone 

Australians are now one step closer to having access to another essential layer of protection against scammers with the design of the country’s Confirmation of Payee service now complete. Australian Payments Plus (AP+) and the Australian Banking Association (ABA) announced the milestone which, when rolled-out, will enable people paying to an account with a name, BSB [6-digit bank identifier code] and account number to confirm the account name of the payee before the payment is made.  

This tool adds a layer of protection in the prevention of scams and frauds resulting from misdirected payments and reduces mistaken payments by consumers. The Confirmation of Payee service will include a central matching service to determine a name match based on account data provided by each payee Financial Institution (FI) compared to the account name entered by the payer. 

Where a name match result is a match or close match, a name display will be provided to the payer – if the result is not a match, then the name of the account holder will not be displayed. Where the payee is an account held by more than one person, only the person named by the payer will be displayed, along with an indication that there are other account holders (‘and others’). It will not display the other names associated with that account. There will be no central database, instead all account data will remain with the FI or service provider. 

AP+ has selected Swift to build and manage the central matching service that underpins the Confirmation of Payee service. The service is expected to be rolled out in phases, with centralised capability, including account matching logic and standardised APIs, being progressively built and tested throughout 2024. This will allow financial institutions to integrate the service into their banking channels starting in early 2025.  

 

Taiwan Depository & Clearing Corporation selects Citi for global custody services

Citi Securities Services has been selected by the Taiwan Depository & Clearing Corporation (TDCC) to provide global custody services as the latter implements a new centralised custody platform in the market.

TDCC’s centralised custody platform is being developed in accordance with an amendment by the Financial Supervisory Commission to improve asset safety for local investors holding overseas investments via local brokers. In Taiwan, sub-brokerage is one of the fastest-growing areas in the local financial market. Local brokers will hold clients’ overseas investments with the TDCC on the back of the new centralised custody platform.

According to the Taiwan Securities Association, from January to May 2024, local sub-brokerage transactions totalled the equivalent of around US$89bn, a year-on-year increase of more than 60% as retail investors’ interest in overseas investments continues to increase. Citi will support investment flows on TDCC’s platform by leveraging its global custody network of over 100 markets, including its proprietary sub-custody network of 63 markets.

 

Stronghold becomes a Nacha preferred partner

Nacha has announced Stronghold as a Preferred Partner for ACH Experience and ISO 20022. Stronghold joins a select group of innovators Nacha recognises for offering products and services that align with its core strategies to advance the ACH Network.

Stronghold provides an embedded payments product that enables consumers to connect their bank accounts for seamless pay-by-bank transactions, enhancing the checkout experience for end users. Additionally, Stronghold leverages ISO 20022 messaging for various payment workflows, assisting in treasury reporting and payment acceptance across multiple payment rails.

“We are bringing modern ACH into new spaces,” said Tammy Camp, CEO of Stronghold. “This partnership is a great step toward making payments more innovative, accessible, and secure. With Nacha's partnership, we're ready to tackle new challenges and lead the way in the payments industry.”