Category Sponsorship Banner Left

Category Sponsorship Banner Right

Category Sponsorship Banner Middle

Wednesday, 09 September 2020 21:52

Australia’s fintech sector half year 2020 investment grows, despite merger activity decline Featured

By

Investment in Australia’s fintech sector has accelerated in the first half of 2020, reaching US$376.5 million, a more than 150% increase from US$149.05 million in the corresponding period in 2019, with the growth coming despite a decline in merger activity, according to a new fintech report.

According to the Pulse of Fintech report from professional services firm KPMG, a fall in M&A and PE activity, however, caused total investment in Australian fintech to fall from US$1.3 billion in the first half of 2019 to US$548 million this year.

KPMG also reports that the biggest Australian fintech transactions - across 15 deals - recorded in the first half of 2020 were Airwallex and Judo Bank, raising US$160 million in VC investment and US$146.6 million from PE investors respectively.

KPMG says that another area of Australian fintech that continues to gain investor and funding support is the ‘buy now, pay later’ or instalment finance sector, with Zip acquiring US-based QuadPay and China-based mega-giant Tencent buying shares in Afterpay.

And KPMG also says that through COVID-19, more merchants are looking to enhance their e-commerce/POS options for their customers who have shifted their purchasing their activities to online/mobile.

“Australia is showing itself to be a strong fintech hub globally, with solid investments in H1’20 despite rising pandemic concerns. As fintechs in Australia aggressively work to scale and maturity, they are expected to drive increasing investment in the space. Additional offshore acquisitions are also expected as fintechs target international growth,” said Dan Teper, KPMG Australia Partner and Head of Fintech.

“Government is also continuing to play a key role in supporting the growth of a vibrant fintech eco-system in Australia, and in particular during the COVID-19 pandemic. These positive investment numbers will no doubt be helpful to policymakers hoping to accelerate the emergence of the sector as a platform for global Australian companies. With other jurisdictions also looking to create fintech opportunities, we cannot afford to take our foot off the pedal.”

KPMG also highights that during H1’20, a number of governments made big moves to push their fintech agendas forward.

“In March, Australia re-opened submissions to its Select Committee on Financial Technology and Regulatory Technology to better understand how COVID-19 has affected the sector and identify supports that can be rapidly deployed. At the same time, Hong Kong (SAR) introduced an ‘opt-in’ licensing program for Digital Asset Exchanges, and Singapore also introduced a licensing program for Digital Asset Exchange and platforms,” KPMG notes.

The report from KPMG lists 2020 fintech investment global highlights as:

  • Global fintech investment is well behind 2019’s total investment of US$150.4 billion. At mid-year, total fintech investment globally is US$25.6 billion.
  • The Americas accounted for the largest share of total fintech investment at mid-year, with US$12.9 billion investment. ASPAC saw US$8.1 billion in total fintech investment during H1’20, while EMEA saw US$4.6 billion in fintech investment.
  • The Americas and EMEA are currently on track to see a new record annual high of VC investment in fintech. At the end of H1’20, the Americas had attracted US$9.3 billion in VC investment, Asia had attracted US$6.7 billion, and EMEA had attracted US$4 billion.
  • Corporate VC participating investment remained very strong, accounting for US$12.2 billion in fintech investment globally. The US saw a record in VC deal value with corporate participation well over US$2.4 billion in Q1 2020; the following quarter nearly matched that same amount.
  • M&A activity dropped in all regions of the world – a sharp decline due to the mega M&A activity seen during 2018 and 2019. During H1’20, global M&A deals accounted for US$4 billion globally, compared to US$85.7 billion in H2’19.
  • Global investment in cybersecurity flew past 2019’s record high of US$592.3 million, reaching US$870.8 million.

“COVID-19 will be a key driver for fintech investment heading into H2’20 given the strong acceleration of digital trends – such as the use of contactless payments and the increasing demand for e-commerce and digital service models. This will also see strong investment in related enabling technologies – such as cybersecurity, fraud prevention and digital identity management,” said Ian Pollari, Global Fintech Co-Leader, KPMG.

“Over the remainder of 2020, we will likely see investors continuing to focus on late stage deals and safe bets given the current uncertainty. This could potentially create challenges for less mature fintechs which may find themselves running out of cash and struggling to raise additional funding. In H2’20, there will likely be an increasing number of opportunistic investments by corporates and PE firms looking for good deals,” Pollari concluded.


Subscribe to ITWIRE UPDATE Newsletter here

GRAND OPENING OF THE ITWIRE SHOP

The much awaited iTWire Shop is now open to our readers.

Visit the iTWire Shop, a leading destination for stylish accessories, gear & gadgets, lifestyle products and everyday portable office essentials, drones, zoom lenses for smartphones, software and online training.

PLUS Big Brands include: Apple, Lenovo, LG, Samsung, Sennheiser and many more.

Products available for any country.

We hope you enjoy and find value in the much anticipated iTWire Shop.

ENTER THE SHOP NOW!

INTRODUCING ITWIRE TV

iTWire TV offers a unique value to the Tech Sector by providing a range of video interviews, news, views and reviews, and also provides the opportunity for vendors to promote your company and your marketing messages.

We work with you to develop the message and conduct the interview or product review in a safe and collaborative way. Unlike other Tech YouTube channels, we create a story around your message and post that on the homepage of ITWire, linking to your message.

In addition, your interview post message can be displayed in up to 7 different post displays on our the iTWire.com site to drive traffic and readers to your video content and downloads. This can be a significant Lead Generation opportunity for your business.

We also provide 3 videos in one recording/sitting if you require so that you have a series of videos to promote to your customers. Your sales team can add your emails to sales collateral and to the footer of their sales and marketing emails.

See the latest in Tech News, Views, Interviews, Reviews, Product Promos and Events. Plus funny videos from our readers and customers.

SEE WHAT'S ON ITWIRE TV NOW!

BACK TO HOME PAGE
Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

Share News tips for the iTWire Journalists? Your tip will be anonymous

WEBINARS ONLINE & ON-DEMAND

GUEST ARTICLES

VENDOR NEWS

Guest Opinion

Guest Interviews

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News

Comments