And according to KPMG, in its Pulse of Fintech H2’2019 report - which tracks venture capital, private equity and mergers & acquisitions across global fintech markets - Australia bucked the global investment trend, which saw 2019 fall just shy of 2018’s record with US$135.7 bilion invested across 2,693 deals.
KPMG points to notable venture capital deals in Australia including neobank Athena’s US$43.4 mil Series C round, Grow Super’s US$11.8 million Series B funding round and Cover Genius’ US$10 million Series C round.
“2019 was a break-out year for Australia’s fintech ecosystem, with large-scale M&A activity driving the result alongside significant VC investment in emerging players,” said Dan Teper, KPMG Head of Fintech – Australia.
“There is a depth of innovation across multiple areas of fintechs, including banking and lending, proptech, insurtech and superannuation – and this is increasingly being recognised by investors and corporates.
“As we move forward, we would hope to building on the momentum of 2019, in particular as Australia further develops our digital banking regime and open banking regulations.”
KPMG says that globally, many niche areas of fintech continued to grow and evolve throughout 2019 - in particular, proptech investment grew from USUS$1.9 bil in 2018 to a record US$2.6 billion in 2019, while fintech-focused cybersecurity investment more than doubled from US$316.9 million to US$646.2 million.
The professional services firm also reported that blockchain and cryptocurrency investment continued to fluctuate, falling from US$6.3 billion to US$4.7 billion year-over-year, “although Facebook’s announcement of Libra and the People’s Bank of China’s announcement of accelerated research and experimentation on digital currency and electronic payments have helped breathe new life into the space”.
KPMG lists 2019 key global highlights as:
- Global fintech investment fell short of 2018’s record year, with US$137.5 bil invested in 2019 compared to US$141 bil in 2018.
- Global fintech M&A rose from US$91 bil in 2019 to a record-high of US$97.3 bil in 2019, despite a strong drop in the number of M&A deals from 622 to 426.
- Global corporate VC investment participation rose during every quarter of 2019, leading to US$16.7 bil in total annual VC invested with Corporate Venture Capital (CVC) involvement; CVC-related deal volume was also robust, with 553 deals over 2019, including 166 in Q3’19 – the second-highest quarter ever in terms of CVC fintech deals volume after Q2’18.
- Cross-border M&A held strong at US$54.2 bil in deal value – despite ongoing global trade tension
- The number of fintech deals by global tech giants – including Alibaba Group, Alphabet, Apple, Baidu, IBM, Microsoft and Tencent – increased for the fifth straight year, with US$3.5 bil invested across 46 deals in 2019.
- Cybersecurity related fintech investment more than doubled year-over-year, from US$316.9 mil to US$646.2 mil.
- Proptech investment rose to a record high of US$2.6 bil in 2019 from US$1.9 bil in 2018.
In Asia KPMG says the region saw relatively strong funding compared to historical norms.
“In 2018, Asia saw a massive high of fintech investment, primarily due to the record-breaking US$14 bil raise by Ant Financial. When compared to all years prior to 2018, fintech investment in Asia remained relatively steady in 2019 with US$12.9 bil invested,” KPMG notes.
“The largest deals in Asia during 2019 included the US$1.2 bil acquisition of Property Exchange Australia by Commonwealth Bank of Australia in H1’19, and the US$1.7 bil Series G raised by India’s Paytm in H2’19. India saw a record-breaking US$3.8 bil of fintech funding in 2019, driven by a record Q4’19 (US$2.3 bil) which included Paytm’s US$1.7 bil raise.”