Pulse of Fintech H1 2021 – Americas

In H1’21, fintech investment in the Americas reached US$51.4 billion with 1,188 deals.

In H1’21, fintech investment in the Americas reached US$66.2 billion with 1,189 deals.

Americas attracts $51.4 billion in fintech investment, including record $31 million in VC

Fintech investment in the Americas reached $51.4 billion in H1’21, with VC investment accounting for $31 billion — shattering the previous annual high of $24 billion set in 2020. The continued innovations in financial technology, combined with the dramatic increase in use of digital offerings has made fintech one of the most active sectors of investment, both from a VC perspective and from an M&A standpoint. Key H1’21 highlights from the Americas include:

Payments hot across the Americas

The payments space was incredibly active in H1’21. Exits got a significant amount of attention in the US — with alternative lender Affirm raising $1.2 billion in its IPO and Deluxe acquiring First American Payments for $960 million.¹ VC funding in the payments space was particularly notable in Latin America where Brazil-based Nubank raised $1.5 billion.

Bar graph - Total Americas investment activity

Valuations driving unicorn births

Fintech valuations remained high in H1’21 as investors continued to see the space as attractive and well-performing. This likely drove the explosion of unicorn births in the first half of 2021. While the importance of unicorn status is waning in the US given its proliferation of unicorns, it is still a significant milestone elsewhere in the Americas. In H1’21, Canadian e-commerce company Clearco and ID verification firm Trulioo became unicorns, in addition to Mexico-based cryptocurrency platform Bitso.

Corporates getting into crypto space

During H1’21, a number of corporates in the US made big bets on cryptocurrencies, including Paypal — which acquired crypto-security firm Curv in H1’21 following its announcement of a partnership with Paxos in late 2020. Paypal ventures contributed to Paxos’s $300 million raise in H1’21.² Facebook, through the Diem Association, also continued to move forward with its plans to launch a US dollar stablecoin before the end of the year.³

Consolidations in the B2B space

H1’21 saw a number of consolidations occurring in the B2B space, including Bill.com’s acquisition of Divvy. The B2B payments space is quite hot — and is expected to remain very attractive to investors given the amount of room it has to grow as companies across the Americas move from cheque-based payments to electronic payments. As companies look to scale and gain market share, more consolidations will likely occur.

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Wealthtech sector growing at a rapid pace in Americas

Interest in wealthtech grew considerably in the Americas during H1’21, with US-based Robinhood raising $3.4 billion and Canada-based Wealthsimple raising $600 million. PE firms Motive Partners and Clearlake Capital also bought an 80% stake InvestCloud during H1’21.

Trends to watch for in H2’21

increasing investments by PE firms focusing on fintech
continued investment growth in areas including payments, alternative lending, crypto and wealth management
an increase in SPAC acquisitions focused on unicorn and near unicorn fintechs
bigger deals across the Americas, particularly in Latin America as fintechs continue to mature
emergence of super apps and platforms that provide consumers with a broader range of offerings — including financial products.

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VC investments surge and cross-border M&A more than doubles all of 2020.

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global and regional analysis with key investment data and insights
top fintech trends for 2021 and beyond
interview with Jason Pau, Chief of Staff, International to the Chairman and CEO, Ant Group
fintech segment insights for a deeper dive into payments, insurtech, regtech, wealthtech, cybersecurity, blockchain and cryptocurrency
spotlight article, Putting big data at the heart of decision-making.

To learn more about the analysis and topics raised in this edition, or to discuss your organization's unique fintech agenda and roadmap, please contact your local KPMG advisors or the contributors in this publication.