Global fintech investment turned a corner in 2025. After three consecutive years of decline — from a peak of $168.4 billion in 2022 to a seven-year low of $95.5 billion in 2024 — total investment rebounded to $116 billion, according to KPMG’s latest Pulse of Fintech report, published in February 2026. The recovery was driven by larger deal sizes, a resurgence in exit activity, and surging investor interest in two dominant themes: digital assets and artificial intelligence.
But the headline number obscures a more nuanced reality. While capital deployment increased by 21% year-over-year, the total number of deals fell to 4,719 — an eight-year low and the fourth consecutive annual decline. Investors are not spreading their bets more widely; they are concentrating capital into fewer, larger, later-stage companies with proven business models and clear paths to profitability. The era of broad-based fintech funding optimism has not returned. What has returned is selective confidence in specific sectors and companies that have survived the downturn.
For anyone operating in open banking, financial data infrastructure, or payments technology, the report contains critical signals about where institutional capital is flowing, which fintech subsectors are gaining traction, and what the competitive landscape will look like over the next twelve months.
The Global Picture: More Money, Fewer Deals
The overall investment picture for 2025 tells a story of recovery in capital deployed but continued contraction in deal activity. The $116 billion total represents a meaningful increase from 2024’s $95.5 billion, but remains well below the $168.4 billion peak of 2022 and the $119.3 billion recorded in 2023. Venture capital accounted for the largest share at $56.7 billion across 3,765 deals, followed by M&A at $55.3 billion across 840 deals. Private equity growth funding declined from $5.5 billion to $4 billion.
| Year | Total Investment | Deal Count | VC Investment | M&A Value | PE Growth |
|---|---|---|---|---|---|
| 2022 | $168.4B | 8,314 | $92.1B | $65.6B | $10.7B |
| 2023 | $119.3B | 5,764 | $51.1B | $58.6B | $9.6B |
| 2024 | $95.5B | 5,533 | $45.4B | $44.6B | $5.5B |
| 2025 | $116.0B | 4,719 | $56.7B | $55.3B | $4.0B |
| Source: KPMG Pulse of Fintech H2’25 (data provided by PitchBook, as of 31 December 2025) | |||||
The decline in deal count is particularly significant for early-stage fintech companies. Investors are increasingly channelling capital into late-stage rounds and proven platforms rather than seeding new entrants. Median pre-money valuations at the venture growth stage surged from $168.3 million in 2024 to $977.5 million in 2025 — a nearly six-fold increase that reflects the concentration of capital in a shrinking number of category-defining companies. For founders raising seed or Series A rounds, the funding environment remains materially more difficult than the headline investment figures suggest.
Regional Breakdown: Americas Dominates, EMEA Recovers, Asia-Pacific Struggles
The Americas accounted for more than half of global fintech investment in 2025, attracting $66.5 billion across 2,409 deals. The US alone represented $56.6 billion of this total, up from $42.4 billion in 2024. The American recovery was driven by a combination of large late-stage VC rounds, a reopening IPO market, and strong activity in the digital assets space following the passage of the GENIUS Act.
The EMEA region saw a modest but meaningful recovery, with investment rising to $29.2 billion from a 2024 low, despite deal volume falling to an eight-year low of 1,484. The UK retained its position as Europe’s dominant fintech hub with $10.9 billion in investment, followed by the Nordics with a strong $5.3 billion — of which Sweden accounted for $4.8 billion. The region saw growing regulatory momentum, with the European Parliament agreeing to both the Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3) during H2’25, providing greater clarity for open banking and payments companies operating across the EU.
Asia-Pacific was the weakest region, with investment falling to a ten-year low of $9.3 billion across just 763 deals. China’s fintech sector continued to contract amid economic challenges and regulatory tightening, while Australia experienced rightsizing. South Korea was a bright spot, with investment nearly doubling to $402 million, though much of that was concentrated in a single deal — fintech super app Toss’s $200 million raise.
| Region | 2024 Investment | 2024 Deals | 2025 Investment | 2025 Deals | YoY Change |
|---|---|---|---|---|---|
| Americas | $55.4B | 2,627 | $66.5B | 2,409 | +20.0% |
| EMEA | $26.5B | 1,803 | $29.2B | 1,484 | +10.2% |
| Asia-Pacific | $11.7B | 1,028 | $9.3B | 763 | −20.5% |
| Global Total | $95.5B | 5,533 | $116.0B | 4,719 | +21.5% |
| Source: KPMG Pulse of Fintech H2’25 (data provided by PitchBook, as of 31 December 2025) | |||||
Digital Assets: The Dominant Theme of 2025
The digital assets sector was the standout investment story of 2025. Total global investment in the space nearly doubled year-over-year, rising from $11.2 billion to $19.1 billion. While the total remained below the $32.2 billion record set in 2021, the current trajectory — driven by regulatory certainty rather than speculative frenzy — suggests a more sustainable growth path.
The catalyst was regulatory clarity. In the US, the passage of the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) in H2’25 gave banks and institutional investors the legal framework they needed to participate in the digital assets ecosystem with confidence. In Europe, MiCA (Markets in Crypto-Assets) came into full force at the end of 2024, establishing a comprehensive regulatory regime across the EU. The UK announced plans for its own regulatory framework, expected to be in force by 2027.
Stablecoins attracted particularly intense interest. A consortium of major European banks — including ING, BNP Paribas, KBC, and UniCredit — announced the creation of Qivalis, a new entity mandated to launch a euro-pegged stablecoin by end of 2026. Separately, a group of global systemically important banks including Bank of America, Deutsche Bank, Goldman Sachs, UBS, and Citigroup announced plans to jointly explore issuing a stablecoin pegged to G7 currencies. Asset tokenisation — particularly of money market funds and real estate — also gained momentum, with BlackRock announcing plans to tokenise its top-performing ETFs and Fidelity launching a digital interest token fund.
The IPO market for digital asset companies reopened in a meaningful way during 2025, with blockchain lender and stablecoin issuer Figure raising $787.5 million and crypto exchange Gemini raising $425 million in Nasdaq listings during H2’25. Coinbase’s $2.9 billion acquisition of crypto derivatives exchange Deribit was the largest deal in the sector’s history.
AI-Focused Fintech: $16.8 Billion and Growing
AI-focused fintech companies attracted $16.8 billion in global investment in 2025, up from $12.1 billion in 2024, with deal volume rising from 1,183 to 1,334. Corporate investors were particularly active, driven by a focus on AI solutions that could deliver operational efficiencies and cost savings in areas like compliance automation, fraud detection, credit decisioning, and customer service.
However, KPMG’s analysis reveals an important distinction: the majority of corporate AI investment flowed to partnerships with large technology and AI companies rather than to fintech startups. Banks and financial institutions increasingly chose to work directly with established AI providers to develop internal capabilities rather than relying on third-party fintech vendors. This trend was particularly visible in the regtech space, where total investment actually declined from $6.8 billion to $4.9 billion even as banks accelerated their internal AI compliance programmes.
The implication for AI-focused fintech startups is clear: to attract meaningful investment, they will need to develop differentiated intellectual property that large institutions cannot easily replicate through partnerships with big tech. Generic AI wrappers around existing processes will not be sufficient. The winners will be companies that enable genuine business model transformation or deliver capabilities that are specific enough to financial services that general-purpose AI platforms cannot match.
Sector-by-Sector: Where the Money Went
The KPMG report breaks down investment across six fintech subsectors, revealing significant variation in momentum and investor sentiment.
| Subsector | 2024 Investment | 2024 Deals | 2025 Investment | 2025 Deals | YoY Change |
|---|---|---|---|---|---|
| Payments | $20.4B | 655 | $19.2B | 542 | −5.9% |
| Digital Assets | $11.2B | 1,584 | $19.1B | 1,199 | +70.5% |
| AI-Focused Fintech | $12.1B | 1,183 | $16.8B | 1,334 | +38.8% |
| Insurtech | $2.9B | 298 | $8.6B | 291 | +196.6% |
| Regtech | $6.8B | 431 | $4.9B | 519 | −27.9% |
| Wealthtech | $4.9B | 58 | $1.4B | 57 | −71.4% |
| Cybersecurity | $0.9B | 93 | $0.7B | 72 | −22.2% |
| Source: KPMG Pulse of Fintech H2’25 (data provided by PitchBook, as of 31 December 2025) | |||||
Payments investment was relatively flat at $19.2 billion, but the composition shifted significantly. Investors moved away from consumer-focused models toward B2B payments infrastructure, and emerging markets — particularly South America — attracted growing attention. Revolut’s $3 billion raise at a $75 billion valuation was the sector’s landmark deal, while B2B payments, real-time payments monetisation, and cross-border settlement infrastructure dominated the deal pipeline.
Insurtech investment tripled on the back of two outlier deals — the $2.6 billion acquisition of Next Insurance by Ergo and the $2.5 billion take-private of Sapiens International by Advent — but underlying deal volume remained soft. Wealthtech investment collapsed from $4.9 billion to $1.4 billion, reflecting both the absence of large outlier deals and a broader shift of investor attention toward AI and digital assets.
The regtech decline is particularly significant for the open banking ecosystem. Despite a growing regulatory burden — PSD3, DORA, the EU AI Act, MiCA — investment in standalone regtech companies fell as banks increasingly chose to build AI-driven compliance capabilities internally rather than buy them from third-party vendors. This is a structural shift that may permanently reshape the regtech market, accelerating consolidation and pushing smaller players toward early exits via acquisition.
The Exit Market Reopens
Perhaps the most encouraging signal in the entire report is the recovery in fintech exit activity. Global exit value more than doubled year-over-year, from $46.8 billion to $104.4 billion — the third highest level on record. The number of exits increased from 438 to 486. Critically, the US IPO market reopened for fintech companies in a meaningful way, with VC-backed fintech IPOs generating $63 billion in global exit value — the second highest annual total after the 2021 boom.
The reopening of exit markets matters for the entire fintech funding ecosystem. VC and PE investors need exits to generate returns and recycle capital into new investments. The absence of viable exits during 2022-2024 created a bottleneck that depressed both fundraising and deal activity. With exit paths reopening — particularly through IPOs and strategic M&A — the conditions are in place for a more robust investment cycle in 2026.
What This Means for Open Banking and Financial Infrastructure
Several trends in the KPMG report have direct implications for the open banking, payments, and financial data infrastructure space that MyValue Solutions covers.
The concentration of payments investment in B2B infrastructure and real-time settlement is consistent with the broader shift from consumer-facing fintech to backend plumbing. Companies building the middleware that connects banks, payment processors, and third-party providers — the exact infrastructure layer that open banking depends on — are attracting institutional capital at a level that suggests investors see long-term value in this segment.
The regulatory momentum around PSD3, PSR, and FIDA in Europe creates both opportunity and complexity for open banking platforms. The KPMG report notes that the European Parliament agreed to both the PSR and PSD3 during H2’25, which will harmonise payment services regulations and create a more competitive environment for third-party providers. For companies operating in this space, the regulatory direction is unambiguously positive — but implementation timelines and technical standard-setting will determine how quickly the benefits materialise.
The decline in regtech investment, paradoxically, may benefit open banking infrastructure providers that embed compliance capabilities directly into their platforms. As banks move away from point-solution regtech vendors toward integrated AI-driven compliance tools, the companies best positioned to capture this demand are those that offer compliance as a feature of a broader infrastructure offering — not as a standalone product.
Finally, the emergence of agentic commerce — AI agents that can initiate and complete financial transactions autonomously — connects the AI investment trend directly to the payments and open banking infrastructure layer. As KPMG notes, agentic commerce is expected to drive “channel and distribution disruption in the consumer domains, while also taking hold in payment financial market infrastructure in wholesale markets.” For open banking APIs and payment initiation services, the rise of AI agents as a new category of transaction initiator represents a significant expansion of the addressable market — and a new set of infrastructure requirements that do not yet exist at scale.
Looking Ahead: KPMG’s Top Predictions for H1 2026
KPMG identifies five key trends to watch in the first half of 2026. Digital assets and tokenisation will remain the dominant narrative, with stablecoins, tokenised deposits, and real-world asset tokenisation all accelerating. AI will continue to attract the largest share of overall investment, though corporates will prioritise partnerships with big tech over investments in fintech startups. Capital markets are expected to see significant disruption as startups targeting equity trading, debt capital markets, and private credit mature. Asset management — particularly in Asia-Pacific — is positioned for a technology-driven transformation, and the UAE is moving aggressively to position itself as a global hub for fintech and real-world asset tokenisation.
The overall tone of the report is cautiously optimistic. KPMG’s global fintech lead Anton Ruddenklau describes a market that is “finding its footing again” — one where macroeconomic and geopolitical risks remain real, but where the combination of stronger exit markets, regulatory clarity, and accelerating innovation provides a constructive foundation for sustained investment. For companies building in the open banking and financial infrastructure space, the message is clear: the funding environment is improving, but selectivity is the defining feature. The companies that will attract capital in 2026 are those with proven revenue models, differentiated technology, and a clear path to profitability — not those that are simply riding the AI or digital assets narrative without substance behind it.
Frequently Asked Questions
How much was invested in fintech globally in 2025?
According to KPMG’s Pulse of Fintech report, total global fintech investment reached $116 billion across 4,719 deals in 2025, up from $95.5 billion across 5,533 deals in 2024. The increase in investment despite a decline in deal count reflects investor concentration on larger, later-stage deals with companies that have established business models and clear paths to profitability.
Which fintech sectors attracted the most investment in 2025?
Payments remained the largest fintech subsector by investment volume at $19.2 billion, followed closely by digital assets at $19.1 billion — which nearly doubled year-over-year. AI-focused fintech companies attracted $16.8 billion, up from $12.1 billion in 2024. Insurtech saw a dramatic increase to $8.6 billion, though this was driven by two outlier deals rather than broad-based growth.
What drove the surge in digital assets investment?
Regulatory clarity was the primary catalyst. The passage of the GENIUS Act in the US provided a legal framework for stablecoins, while the EU’s MiCA regulation came into full effect. These developments gave banks and institutional investors the confidence to participate in the digital assets ecosystem. Stablecoins, asset tokenisation (particularly money market funds), and strong IPO activity from companies like Figure and Gemini all contributed to the investment surge.
Why did regtech investment decline despite growing regulation?
Regtech investment fell from $6.8 billion to $4.9 billion despite an expanding regulatory landscape. KPMG attributes this to banks and financial institutions increasingly building AI-driven compliance capabilities internally rather than purchasing from third-party regtech vendors. This structural shift, combined with the fragmented and niche nature of most regtech startups, is driving early exits through acquisition and challenging the long-term viability of standalone regtech business models.
What does the report say about fintech exits and IPOs?
Fintech exit activity recovered strongly in 2025, with global exit value more than doubling from $46.8 billion to $104.4 billion — the third highest level on record. The US IPO market reopened meaningfully for fintech companies, with VC-backed fintech IPOs generating $63 billion in global exit value. Digital asset companies were particularly active on the IPO front, and post-IPO performance was generally positive, which bodes well for the pipeline of companies considering public listings in 2026.
MyValue Solutions is an independent publication. We are not affiliated with KPMG, PitchBook, or any company mentioned in this article. All data cited is sourced from KPMG’s Pulse of Fintech H2’25 report (data provided by PitchBook, as of 31 December 2025). This analysis represents our editorial assessment and should not be construed as investment or financial advice.