Global fintech investment plummeted to $164.1 billion in 2022 from a record high level of $238.9 billion in 2021, auditing and tax services provider KPMG said on Wednesday.
Despite the decline, total investment was still the third highest ever, according to the KPMG report.
Deal volume also dove to 6,006 last year, down by nearly 18% from 7,321 the previous year.
"2022 was a particularly excellent year for regtech, with investment growing quite significantly year-over-year," said Anton Ruddenklau, global fintech leader, and partner and head of financial services advisory KPMG in Singapore.
Global fintech investment in the second half of last year amounted to $44.9 billion, plummeting from $119.2 billion in the first half of the year.
The more than 50% decline compared to the six-month periods was led by the sharp drop-off in large deals as the global fintech sector was hit by geopolitical uncertainty, rising interest rates and inflation, the downward pressure on valuations, and initial public offering (IPO) market drying up.
In January-June 2022, eight mergers and acquisitions deals greater than $1 billion was sealed, including the $27.9 billion acquisition of Australia-based Afterpay, two VC raises (Germany-based Trade Republic, UK-based Checkout.com) and one PE deal (US-based Genesis Digital Assets) globally.
On the other hand, in July-December 2022, four deals over the same amount were signed, the largest being the $8.4 billion buyout of US-based Avalara.
On a regional basis, the Americas continued to get the largest piece from the cake, attracting $68.6 billion across 2,786 deals in 2022, of which the US accounted for $61.6 billion across 2,222 deals.
The Asia-Pacific region saw $50.5 billion in fintech investment across 1,227 deals, while the Europe, Middle East, and Africa region attracted $44.9 billion across 1,977 deals, AA reports.
