Pulse of Fintech H1 2022 – ASPAC

$27.9 billion Afterpay acquisition propels fintech investment in Asia-Pacific to record high at mid-year

Fintech investment in the Asia-Pacific region hit an annual record high of $41.8 billion with 6 months left in 2022, largely driven by Block’s $27.9 billion acquisition of Australia-based Afterpay. The region saw a diversity of jurisdictions attract good-sized deals during H1’22. In addition to the Afterpay acquisition, Australia saw the $1 billion merger of Superhero and Swiftx, Japan saw the $2 billion buyout of Yayoi by KKR, Singapore-based Coda Payments raised $690 million, Indonesia-based Xendit raised $300 million, and India-based fintechs Stashfin and Oxyzo raised $270 million and $237 million respectively.

Fintech investment in China remained limited during H1’22; the largest fintech deal in the country was a $140 million raise by corporate expense management company Fenbeitong. Key H1’22 highlights from the Asia-Pacific region include:

New challenges, new priorities for investment

While investment in areas that saw significant interest during the height of the COVID-19 pandemic have lost some attractiveness, areas that align with rapidly evolving global issues — including rising inflation, increasing interest rates, geopolitical uncertainty, and supply chain woes — have continued to see investment. Key areas that garnered attention from investors in the Asia-Pacific region during H1’22 included supply chain management, cybersecurity and privacy, identity management, and governance and compliance. Open data also saw solid investment during H1’22, in addition to infrastructure companies focused on the crypto space.

Modernization of financial systems continues to drive activity

In many parts of the Asia-Pacific region, particularly jurisdictions outside of China, the infrastructure underpinning existing financial markets is viewed as quite aged — from the technologies used directly by exchanges to different payments rails. This is driving a significant amount of investment towards the innovation of financial market infrastructure and to the digital last mile of transactions.

Digital transformation a government priority in China

In China, digital transformation continues to be a significant government priority. During H1’22, The People’s Bank of China released its Fintech Development Plan (2022-2025), which stressed its commitment to appropriate regulation, privacy and data protection, low carbon and green fintech, and fair and inclusive financial services. While fintech investment in China was quite soft in H1’22, companies focused on infrastructure plays and partnerships with traditional financial institutions still gained attention from investors, while insurtechs focused on similar plays also began to attract interest.

Trends to watch for in H2’22

• Regulators continuing to focus on making industry changes to support open banking and decentralized finance in an orderly and safe way.
• Investors taking a more focused approach to their investments, prioritizing investments in companies with very strong business models and distinctive value propositions.
• Growing focus on B2B solutions and tech enablement of traditional players, rather than standalone fintech plays —particularly in China.
• Challenger banks continuing to grow, although at a relatively slow pace.

Global fintech investments in H1 2022 recorded $107.8B with 2,980 deals

Download this edition for:

• Global and regional analysis with key investment data and insights
• Interview with bolttech and spotlight article on embedded finance
• Fintech segment insights for a deeper dive into payments, insurtech, regtech, wealthtech, cybersecurity, blockchain and cryptocurrency

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.