Thanks to increasing deal value, strong performance in the Private Equity sector and Venture Capital sectors, advisory and tax firm KPMG reported that investments into American fintechs almost doubled from $2.6 billion in Q2 2017 to $5 billion in Q3 2017. This data comes from the latest “Pulse of Fintech” report, which showed a slight decrease in deal value but an increase in valuation of fintech companies.
Later-stage valuations have finally started turning upward, recovering from a decline that started in 2015, and overall global fintech investment remained strong in Q3 at $8.2 billion, a decrease from Q2’s $9.3 billion. Despite the lower investment globally, investor sentiment remained positive in Asia, the Americas, and Europe.
Half of the largest deals this quarter occurred in the U.S., including the merger & acquisition (M&A) of Intacct for $850 million, the private/public M&A of CardConnect at $750 million, and the secondary buyout of Xactly for $564 million. Outside of large-scale deals in America, the total number of deals for Q3 is 142 deals, an increase from the 125 in Q3 of 2016, but a slight decrease from the prior quarter’s 147.
The leader for Financial Services’ Digital and Fintech practice in the U.S., Anthony Rjeily, talked about the changing landscape of fintechs in a press release, saying, "We see a lot of optimism in the U.S. Fintech market – from the maturation and adoption of early stage technologies like Big Data, Artificial Intelligence and IoT to the rapid acceleration of others, such as Insurtech, Robo-advisory, Blockchain and Regtech. Looking ahead, the fintech sector is expected to evolve rapidly, including both mature fintechs and large technology players diversifying into adjacent services."