The Covid-19 pandemic will be a key driver for change accelerating investments in fintech ventures during the second half of the year, according to the ‘Pulse of Fintech H1 2020’ report by KPMG.

“Covid-19 will remain a key driver of change for fintech investment heading into H2’20 given the strong acceleration of digital trends — such as the use of contactless payments and the demand for and use of digital service models,” the report said.

“Pre-Covid-19, fintech-driven financial services especially in lending, insurtech and distribution have been attracting significant investments. Covid-19 has in fact fast-tracked the digital economy and significant investments are being made by established banks and insurance companies, which can also lead to acquisition and more investments from investors,” Sanjay Doshi, Partner and Head – Financial Services, KPMG in India, said.

Deal count

According to the report, the total investment activity, including venture capital, private equity and investments in mergers and acquisition in fintech in India, stood at $1,052.4 million in Q1’20. The deal count in the first quarter was about 38. Investments stood at $647.5 million, with the deal count at about 32 in Q2 ’20 as per the report.

“While the ongoing pandemic and challenges with international deal-making could be a damper on fintech investment in India in H2’20, the region is expected to remain a major opportunity for investors over the medium and long-term,” the report said.

At mid-year, the total fintech investment globally stood at $25.6 billion with the Americas accounting for the largest share of total fintech investment with $12.9 billion. ASPAC accounted for $8.1 billion in total fintech investment during H1’20, while EMEA saw $4.6 billion in investment, the report said.

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