Fintech Flourishes: A Recap of 2021
The year 2021 marked a momentous period for the fintech market, witnessing an unprecedented surge in deals across major regions like the Americas, EMEA, and Asia-Pacific. Fintech investment reached record highs, with both venture capital (VC) and private equity (PE) investments soaring. The landscape of fintech solutions attracting funding expanded, with notable interest in cryptocurrencies, blockchain, wealthtech, and cybersecurity.
“As we step into 2022, the global outlook for fintech investment remains exceptionally optimistic. Various subsectors are poised for continued evolution, while new ones are expected to emerge and thrive. In the Americas, fintech investment stood strong in 2021, boasting a record 2,660 deals totalling $105 billion. VC investment skyrocketed to $65 billion, surpassing the previous record of $25 billion in 2020. PE investment also reached new heights at $5.8 billion, well beyond the previous record of $1.5 billion set in 2019. Despite a year-over-year drop in M&A value, the record number of M&A deals underscores the enduring interest in fintech”
Payments and Digital Banking: Throughout 2021, significant fintech investment in the Americas was propelled by the payments and digital banking sector. Notable deals included the $1.4 billion acquisition of American First Finance by First Cash and the $1.1 billion VC raise by Chime in H2'21. Latin America also witnessed robust investment, with Nubank, Uala, and Kueski securing substantial funding.
Corporate Investment Surge: Corporate interest in fintech reached unprecedented levels in the Americas in 2021, with corporate venture capital (CVC)-related investment hitting a record $29 billion across 585 deals. The US alone accounted for $22 billion of this total. Traditional players in financial services aggressively expanded their offerings, utilizing VC and M&A as integral components of their strategies.
B2B Fintech Solutions: While B2B services in the Americas historically lagged other payment areas in terms of innovation, 2021 saw a notable shift. Investment in B2B fintechs surged, encompassing VC, PE, M&A, and reverse mergers. Notable examples include Brex, a one-stop finance shop for SMEs, raising $300 million in H2'21. Fintechs addressing companies' AR/AP payment flows are particularly in demand.
As we reflect on the dynamic landscape of fintech in 2021, the stage is set for continued growth and innovation in 2022.