Global Fintech Funding Declines While M&A Activity Surges – Fintech Schweiz Digital Finance News

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In 2024, the global fintech sector saw a decline in funding, with total value dropping by 8% year-on-year (YoY), according to Financial Technology (FT) Partners, a fintech-focused investment bank.

However, the year also witnessed a dramatic uptick in mergers and acquisitions (M&A) activity, with total M&A value surging nearly 80% YoY. This shift highlights a growing focus on consolidation and efficiency, as investors adopt more cautious approaches and larger companies with access to capital take advantage of undervalued or distressed assets through acquisitions.

According to the January 2025 CEO Monthly Market Update and Analysis – Global Fintech Coverage report, fintech companies raised a total of US$4.8 billion through 272 deals in December 2024, bringing the annual total to US$50.3 billion. This represents a 8% decline from US$54.7 billion in 2023.

Despite the funding decline, transaction activity increased significantly, with the number of deals rising 28% from 2,992 transactions in 2023 to 3,844 transactions in 2024, indicating a trend toward smaller transaction sizes.

Monthly fintech financing volume and deal count, Source: Financial Technology Partners, Jan 2025

Cryptocurrency and blockchain led funding activity, recording 1,021 transactions or 26.6% of all fintech financing rounds. Banking and lending technology followed closely with 843 transactions (22%), while financial management solutions ranked third with 617 transactions (16%).

Financing deal count by sector in 2024, Source: Financial Technology Partners, Jan 2025

Though crypto and blockchain recorded the most deals in 2024, the largest rounds were closed in other verticals:

• Abound, a credit technology company based in the UK, secured GBP 800 million (US$986 million) in debt and equity in May to expand into prime lending and roll-out Render, its proprietary AI credit technology platform, globally. The company, which was founded in 2020, uses open banking and artificial intelligence (AI) to provide borrowers with more affordable loans compared to traditional lenders, and has issued over GBP 300 million (US$370 million) in loans to date.
• FNZ, an end-to-end wealth management platform, received in August 2024 a US$1 billion commitment from existing institutional shareholders. The firm, which was founded in 2003, claims over US$1.4 billion in annual revenue, employing 6,000 people over more than 30 countries and digitizing savings and investment for over 24 million consumers.
• Sedgwick, a provider of claims management from the US, closed a US$1 billion equity funding round in November, reaching a valuation of approximately US$13.2 billion. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines.

Selected largest financings in 2024, Source: Financial Technology Partners, Jan 2025

Fintech M&A trends

While funding activity in fintech continued to decline, M&A activity in the sector saw a dramatic upswing in 2024. Total transaction value reached US$183.1 billion, up 79% from US$102.2 billion in 2023.

The number of deals also rose, growing 25% from 1,124 transactions in 2023 to 1,405 transactions in 2024.

Monthly fintech M&A volume and deal count, Source: Financial Technology Partners, Jan 2025

Financial management solutions led the fintech M&A landscape with 386 transactions (27%). Banking and lending tech followed with 250 transactions (17.8%). Wealth and capital markets tech ranked third with 220 deals (15.7%).

M&A deal count by sector by 2024, Source: Financial Technology Partners, Jan 2025

The largest fintech M&A deals of 2024 were:

• Discover: US consumer bank Capital One announced in February plans to acquire US credit card issuer Discover in an all-stock transaction valued at US$35.3 billion. Discover boasts a robust global payments network with acceptance in more than 200 countries and territories.
• Cotiviti: Private equity firm KKR acquired in February a stake in healthcare data and tech business Cotiviti from investment manager Veritas Capital. The transaction valued Cotiviti at US$11 billion, according the Wall Street Journal.
• R1 RCM: Investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice (CD&R) purchased in August R1 RCM, a healthcare revenue management firm. The all-cash transaction was valued at approximately US$8.9 billion.

Selected M&A deals in 2024, Source: Financial Technology Partners, Jan 2025

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