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UK fintech investment fell almost 60% in 2022: KPMG report
The UK's crypto and fintech industry saw investment decline in the second half of 2022 amid a combination of turbulent macroeconomic conditions and record high inflation. Companies in the region closed a total of 591 fintech deals in 2022, compared to 724 in 2021. The fintech trajectory, according to Bloomberg, is according to a report released on Wednesday by big four accounting firm KPMG. The figures show a $22 billion drop in fintech investment in 2022 to just $17 billion – a 60% drop. “The deviation underlines...
UK fintech investment fell almost 60% in 2022: KPMG report
The UK's crypto and fintech industry saw investment decline in the second half of 2022 amid a combination of turbulent macroeconomic conditions and record high inflation.
Companies in the region closed a total of 591 fintech deals in 2022, compared to 724 in 2021.
The Fintech Trajectory
According to Bloomberg, that isDataaccording to a report released Wednesday by Big Four accounting firm KPMG. The figures show a $22 billion drop in fintech investment in 2022 to just $17 billion – a 60% drop.
“The divergence underscores the shift in investor sentiment amid increasing geopolitical challenges resulting in lack of IPO exits, downward pressure on valuations and market turmoil,” he said.
The decline reflects the roughly equivalent decline in total cryptocurrency market capitalization over that time, starting from scratch3 trillion dollarsin November 2021 to under $800 billion in December 2022.
Fintech investments also appeared to dry up just as crypto went into freefall last year. Karim Haji, partner at KPMG, said that far more investment deals took place in the first half of the year than in the second half.
“The divergence underscores the shift in investor sentiment amid increasing geopolitical challenges resulting in lack of IPO exits, downward pressure on valuations and market turmoil,” he said.
Meanwhile, many of Crypto's biggest blowups are likeCelsiusVoyager and Terra emerged in the middle of the year, leading to FTX's infamous meltdown in November.
The biggest draw among the UK's fintech subsectors has been payments services, absorbing $3.6 billion in investment last year.
Globally, fintech companies raised $164.1 billion from over 6,000 investment deals last year, up from $238.9 billion in 2021.
Crypto and Defi Trajectory
Of course, investments in crypto and blockchain-specific companies have also fallen, from $30 billion in 2021 to $23.1 billion in 2022. Meanwhile, the value locked in Defi protocols has fallen to $50 billion, from $180 billion at its peak.
Areportfrom Pantera Capital published last month shows that VC investment in crypto firms fell by over 75% between Q4 2021 and Q4 2022.
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