Fintech investment slows sharply in H1 2025 amid global tensions: KPMG
Global fintech funding declined in the first half of 2025, as geopolitical uncertainties and trade policies weighed on deal activity, according to KPMG.
Total investment—including M&A, private equity, and venture capital—fell to $44.7 billion across 2,216 deals, down from $54.2 billion across 2,376 deals in the second half of 2024.
“Much of the fintech investment so far in 2025 has been highly strategic, with firms focusing on cost-cutting and shedding non-core assets rather than pursuing broad speculative bets,” said Anton Ruddenklau, global fintech and innovation lead at KPMG International.
M&A deal value dropped to $19.9 billion, while PE investments sank to $1.4 billion. Venture capital, however, showed resilience, edging up to $23.4 billion in H1 2025 from $23 billion a year earlier.
By region, the Americas attracted $26.7 billion, EMEA $13.7 billion, and Asia-Pacific $4.2 billion. Digital assets drew $8.4 billion in H1, close to the $10.7 billion raised in all of 2024.
AI-focused fintechs continued to gain momentum, securing $7.2 billion in H1 versus $8.9 billion for the whole of 2024. Ruddenklau said generative AI and agentic AI are set to command premium valuations as investors seek efficiency and value gains.
“Fintech-focused AI is only going to get hotter in the back half of 2025,” he said.
Karim Haji, KPMG’s global head of financial services, added that digital assets and currencies are well positioned for further growth, with regulatory clarity boosting confidence. He noted that Circle’s successful IPO could spur other crypto firms to follow suit.
Click here for more on Finance and Investing
