KPMG Australia

The KPMG Pulse of Fintech report found that after a drop in 2017, investment in fintech reached US$600 million across 28 deals last year.

The single largest transactions for the year was the acquisition of Avoka by Temanos for US$245 million.

KPMG Australia head of banking and global co-lead for Fintech Ian Pollari said that investment had ramped up in Australia driven by key markets.

“Investment in Australian fintech ramped up to record levels in 2018, both in terms of venture capital, but also in terms of private equity and M&A activity,” he said.

Mr Pollari said that the uptick in investment was due to the thriving ecosystem and development in the open banking and data regime.

“We have rapidly built a thriving fintech ecosystem and investment plays a critical role. Open banking is another catalyst for further fintech investment, in particular investment in overseas fintech companies which we are already starting to see,” he said.

Some of the big winners from last year were Data Republic which raised US$22 million in series B funding led by Singapore Airlines and Innov8.

At home, ANZ announced its participation in a series A funding found form UK open banking platform Bud.

Among the sub-sectors of fintech, regtech had a surge in investment worldwide from US$1.2 billion in 2017 to US$3.7 billion in 2018 while blockchain investment stayed steady at US$4.5 billion last year compared to $4.8 billion in 2017.

Moving forward KPMG expected collaboration between fintechs and banks would continue to grow, particularly in areas like digital identity management. Blockchain would continue to grow, particularly in Asia, while regtech and insurtech would remain hot areas for investor interest.