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American Fintech Investment in 3rd Quarter Almost Doubles, According to KPMG

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."