Irish fintech sector secures record $900m investment in first half of 2021

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A new fintech report from KPMG said the total activity for H1 of this year topped the previous record, largely driven by the acquisition of Fenergo.

The fintech sector in Ireland secured $900m of investment and equity transactions in the first half of this year, a report from KPMG has found.

A total of 18 M&A, venture capital and private equity deals combined to break the previous half-year record of $700m set in 2011, and to firmly beat the $329m secured in all of 2020. According to KPMG, the average half-year total over the past five years was approximately $100m.

The single biggest fintech deal so far this year was the $600m buyout of Fenergo by private equity firms Astorg and Bridgepoint in May.

The two next largest deals were the $200m acquisition of Taxamo by Vertex and Wayflyer’s $76m funding round, both also in May. Also notable were Payslip’s €8.3m raise in May and We.trade’s €5.5m funding in February.

The report noted that Ireland’s record-breaking H1 was part of a worldwide trend, with fintech deals totalling $98bn worldwide during the same period, the highest ever in a half-year period.

“Digitisation in business has accelerated phenomenally with Covid-19, which in turn has offered huge opportunity for Irish fintech businesses,” said Anna Scally, partner and head of fintech at KPMG Ireland.

“Take payments for example. Throughout 2020, we saw consumers give up cash almost entirely, embracing alternative payment methods. This acceleration to digital first and the opportunities it creates for fintech businesses has undoubtedly driven a lot of the interest and investment in the fintech space so far in 2021.

“Investor interest in regtech is also particularly strong right now, as evidenced by the Fenergo deal, and it’s only expected to grow over the next few years given the changing regulations in financial services.”

The fintech boom is not limited to the Republic of Ireland. A recent report from Deloitte and FinTechNI laid out a roadmap for a prosperous future for the sector in Northern Ireland. The sector is already worth £392m ($534.8m) per year, according to the report.

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