According to the KPMG, the first half of 2021 brought $98 billion of investments, which is $12 billion more than the second half of 2020 showed. The pandemic has made a great impact on developing digital services. What’s more, venture capital companies have some free funds to invest, and various startups are now active in many countries.
Payment services have received $19 billion in investments in the first half of 2021. The growth of mergers and acquisitions is one of the main trends of the segment. The reason is that large non-financial companies are trying to expand their line of business with the help of payment services.
For example, IKEA bought a stake in Ikano Bank to provide banking services to its customers, and Walmart is ready to create its own fintech products together with Ribbit Capital.
The US has the most popular and the biggest companies. However, investors are becoming interested in other markets as well. For example, a German company WeFox, Indian PolicyBazaar, and French services Alan and Active Assurances are on the rise right now.
Thanks to the partnership with Munich Re and Alliance, Google offers its customers insurance of their data security. More and more companies nowadays will follow Google’s example and implement insurance in their product lines.
Regtech specializes in fighting money laundering, protecting people from fraudsters, and KYC. Europe’s regtech companies are the most active ones.
As everybody knows, cryptocurrencies are quite widespread now. This is another reason why regtech is so popular. Digital asset services aim to provide investors with safe and reliable access to trading and cryptocurrency exchanges and comply with all the requirements.
More and more companies are ready to spend their money on data protection and cyber security. Due to the spread of ransomware viruses, businesses are fully concentrating on detecting vulnerable spots. This encourages investment in artificial intelligence and also changes the focus of companies in cybersecurity.
There is also a growing investment in companies engaged in the development of asset management technologies. The market of technological management companies will grow and consolidate. Moreover, fintech companies are increasingly focusing on personalization and diversification of assets.
Blockchain and Crypto
In the first half of 2021, the amount of money invested in the blockchain and crypto projects broke the record. It was $8.7 billion, which is higher than the 2018 peak of $7.2 billion. Venture investors are the most active.
Trends Not to Miss in 2021
- Investments in the cryptocurrency market will continue growing. Investors will be interested in everything from NFT tokens to trading platforms.
- There are expected to be more mergers and acquisitions, as corporations will aim to enlarge the range of offers for their customers, and startups will strive to scale.
- One of the most significant trends to follow is SPAC mergers. They are expected to be held in the second half of 2021, even though the number of IPOs is growing. Be sure not to miss the $40 billion deal of the Malaysian company Grab.
- Cyber security projects are the hottest trend right now. Unfortunately, more and more viruses appear every day. They are getting highly elaborate and more difficult to detect. The consequences are also quite expensive to deal with.
- B2B services have always been attractive, but in the near future, they are going to become even more desirable. Traditional payment services, insurance technologies, capital management, and some more — you definitely don’t want to miss them.
- In order to widen the range of services, companies (from huge ones to small fintech startups) will seek partnerships even more than they do now.
The amount of investments is going up everywhere. In North and South America, local fintech companies have received $51.4 billion as investments. In Europe, the Middle East, and Africa, the figures have almost doubled. In 2020 it was $25.7 billion; in the first half of 2021, it became $31.9 billion.
Each country has its own preferences. For example, BNPL (buy-now-pay-later) services have become popular in the UK, CaaS and PaaS (credit-as-a-service and payment-as-a-service) — in France, and trading is on the rise in Germany.
Fintech provides plenty of possibilities and spheres to run a business in. Study and practice — and good luck with the one you choose!