Fintech investment in APAC doubles

Despite a decline in fintech agreements and overall global investment between H2 of 2021 and H1 of 2022, APAC investment rose to a record $41.8 billion in the first half of 2022 from $19.2 billion in the second half of 2021.

According to the most recent edition of KPMG’s Pulse of Fintech, three significant M&A transactions—the $27.9 billion acquisition of Australia’s Afterpay by Block, the $2.1 billion purchase of Japan’s Yayoi by KKR, and the $1 billion merger of Australia’s Superhero and Swiftx—were largely responsible for Asia-record Pacific’s numbers.

A significant amount of money is being invested in the development of new financial market infrastructure and the digital last mile of transactions, according to the report, in many areas of the region, especially outside of China, because of the ageing infrastructure that supports the region’s existing financial markets.

Andrew Huang, partner and fintech leader, KPMG China says: “Looking into 2022 2H, regulators in the region are continuing to focus on making industry changes to support open banking and decentralised finance in an orderly and safe way.

“Investors are taking a more focused approach to their investments, prioritising investments in companies with very strong business models and distinctive value propositions. Growing focus on B2B solutions and tech enablement of traditional players is expected, rather than standalone fintech plays, particularly in China.”

However, in the Asia-Pacific area, a number of fintech subsectors, such as retail payments, insurtech, and B2C solutions, experienced a significant decline in interest and excitement during H1’22. Blockchain, cryptocurrency, and NFTs were also taken off the investor radar.