Pulse Of Fintech H1'2025

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While many fintech investors were cautiously optimistic heading into 2025, the combination of headwinds from ongoing geopolitical tensions and rapidly evolving concerns over tariffs and trade policies saw many investors continuing to hold back from making large deals except in a few hot areas like digital assets and currencies and AI.

During H1'25, the fintech market globally attracted $44.7 billion across 2,216 deals — down from $54.2 billion across 2,376 deals in H2'24. Q2'25 was particularly weak, with just $18.7 billion invested across 972 deals globally — hitting lows across 8 and 31 quarters respectively. Much of this slowdown came from continued declines in M&A activity and PE investment. Global fintech M&A deal value fell from $26.7 billion in H2'24 to $19.9 billion in H1'25, while PE growth investment in fintech fell from $4.4 billion to $1.4 billion. Global VC investment in fintech proved more resilient rising nominally from $23 billion to $23.4 billion between H2'24 and H1'25.

The Americas attracted more than half of the fintech investment seen globally during H1'25 ($26.7 billion), led by the $2.6 billion acquisition of US-based Next Insurance. The EMEA region came a distant second, attracting $13.7 billion in in fintech investment, led by the $3.2 billion buyout of UK-based Preqin, while the ASPAC region saw just $4.3 billion in investment, led by the acquisition of Japan-based WealthNavi for $571.3 million.

The digital assets and currencies space was the brightest star in fintech investment globally during H1'25, attracting $8.4 billion, compared to the $10.7 billion seen during all of 2024. AI-focused fintech came a close second, with $7.2 billion in investment, compared to $8.9 billion during all of 2024. The payments space meanwhile saw investment falter amid the lack of significant consolidation megadeals, with just $4.6 billion in investment, compared to 2024's annual total of $30.8 billion.

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Looking ahead to the second half of the year, fintech investors are likely to remain quite selective with their dealmaking after resetting performance and return expectations over the last 3 years. The passing of the GENIUS Act in the US during the first few weeks of July has also set the stage for further activity and investment in the digital asset space, particularly around the use of stablecoins and associated investment in digital asset market infrastructure.

Whether you're the founder of an emerging fintech or the CEO of a large financial institution, it's important to consider what your company can do to make sure you're well positioned to get ahead despite the uncertain future. As you read this edition of Pulse of Fintech, ask yourself: What can we do to enhance our value and profitability, and where do we selectively invest, so that we can better navigate the path to success?

01 Global fintech funding in H1 2025 recorded $44.7B with 2,216 deals

Global insights

Global fintech market attracts $44.7 billion in investment in H1'25

Global fintech investment experiences lowest six-month period in five years

The global fintech market saw $44.7 billion investment during H1'25 — the lowest six-month period since H1'20. The impact of higher interest rates on the cost of capital and expectation of returns has removed more speculative investing and reset fintech investment to a new baseline. While fintech investors were cautiously optimistic entering 2025, new swells of geopolitical tensions combined with shifting US tariff and trade policies made it difficult for investors to feel confident in their dealmaking activities. Q2'25 was particularly soft, with just $18.7 billion invested across 972 deals — a volume of deals not seen since Q3'17.

Americas attracts over half of fintech investment in H1'25, but EMEA sees largest deal

The Americas attracted $26.7 billion in fintech investment in H1'25, led by the $2.6 billion acquisition of US-based Next Insurance by Ergo Group, the primary insurance business of Munich Re¹ and the $2 billion VC raise by Cayman Islands-based Binance. Comparatively, the EMEA region saw $13.7 billion, including the year's largest fintech deal so far — the $3.2 billion buyout of UK based Preqin by BlackRock² — and the $1.7 billion takeprivate of France-based Esker by Bridgepoint.³ The ASPAC region saw just $4.3 billion in fintech investment, led by the acquisition of Japan-based WealthNavi by MUFG for $571.3 million.⁴

Digital assets and currencies on track for three-year high

At a sector level, digital assets and currencies attracted the most fintech investment globally this half year — $8.4 billion, compared to $10.7 billion during all of 2024 — led by a $2 billion raise by Grand Caymans-based crypto exchange Binance. At mid-year, the digital asset space was well positioned to achieve a three-year high in global investment — although it will likely remain well shy of 2021's peak high of $31 billion. Investors showed particular interest in stablecoins, particularly in activities such as trading, remittances, and as a source of payment in emerging markets. Other investment areas include digital asset market infrastructure and tokenization platforms. During H1'25, the digital asset space also saw the incredibly successful IPO of USDC stablecoin issuer Circle; it raised $1.1 billion on the NYSE, with shares popping 168 percent in first day trading.⁵ Other US based digital asset platforms are likely to IPO in the second half of the year.

Global insights

Payments sector sees investment falter

The payments space saw funding dry up considerably in the first half of 2025 as investors held back from making large, $1 billion+ megadeals. During H1'25, the sector saw just $4.6 billion in investment — a far cry from 2024's $30.8 billion annual total. The largest deal in the payments space was a $500 million raise by payments platform provider Rapyd Financial Network. Interest in the payments space remained relatively robust in emerging areas of the world, including Southeast Asia, Africa, and South America, although deal sizes in these regions were relatively modest.

AI enablement a hot priority in the fintech sector as investors embrace agentic AI opportunities

AI was a very hot area of interest among fintech investors in H1'25, attracting $7.2 billion in investment compared to $8.9 billion during all of 2024. The vast majority of interest in AI was focused on enablement — solutions leveraging AI in order to reduce costs, improve efficiencies, and deliver more value. Agentic AI — solutions where AI agents are able to perform a sequence of tasks based on in-themoment data analytics — were particularly attractive, in addition to AI solutions aimed at improving AML and KYC processes. The significant focus on AI by fintech investors was notable, with the median valuation for early-stage AI-driven fintech companies standing at $134 million, well ahead of non-AI driven fintechs.⁶

Cost pressures keep interest in regtech high

While regtech investment was relatively soft in H1'25 — with just $2.1 billion invested globally next to $8.3 billion during all of 2024, deal volume was well on pace to rise to a three-year high with 190 deals at mid-year. The cost of compliance, particularly in Europe, has kept many financial institutions interested in the space as a way to reduce manual effort while improving efficiencies and the ability to fulfil regulatory requirements in different jurisdictions.

Fintech IPOs begin to see pickup

While IPO exits have been dry for quite some time in the fintech sector — particularly in the US — trends started to change in H1'25 with the successful exits of Israel-based investment platform eToro — which raised $620 million in an IPO on the Nasdaq,7 US-based digital bank Chime — which raised $864 million in the Nasdaq,8 and US-based Circle — which raised $1.1 billion on the NYSE.9 The HKSE also saw a slight upswing in IPO activity among fintechs — particularly insurtechs. The IPO market will be key to watch in H2'25 to see whether other mature fintechs follow in their footsteps, particularly for US based digital asset providers.

Global insights

Trends to watch for in H2'25

• Continued interest and investment in US domiciled stablecoins providers, digital asset market infrastructure, tokenization platforms and governance, risk and compliance (GRC) solution providers.
• IPOs of significant digital asset platforms in the US market, following the success of Circle.
• Fast-growing focus on generative and agentic AI solutions that provide infrastructure able to provide workforce capacity across multiple use cases like financial crime and fraud, sales and services, research and underwriting, and software development lifecycle (SDLC).
• Embedded insurance, payments, and finance continuing to be seen as a growth opportunity for multinational companies and fintech-as-a-service providers.
• The reemergence of market consolidation in payments, digital assets, application programming interfaces (API) management and financial market infrastructure (FMI) services.

Global insights — Top fintech trends for H2'25

It's been a more challenging start to 2025 than expected for the fintech market, given geopolitical tensions, the cost of capital and other headwinds. But a number of sectors continued to attract significant interest, including digital assets and blockchain, AI and insurtech, helping to keep the fintech sector relatively resilient as a whole outside of the pull back in very large M&A transactions. Heading into H2'25, this resilience will likely continue to help keep investment relatively stable until market conditions stabilize enough for deals to pick up again.

Here are our top predictions for fintech in H2'25:

1. Fintech investors being very selective across deal types: Globally, fintech investors are expected to continue to be very selective in their funding, focusing VC investments on companies with strong fundamentals and the ability to turn a profit and M&A transactions on very strategic acquisitions.
2. Stablecoins gaining steam amid regulatory push: Stablecoins will likely continue to be a bright spot — along with the digital assets and currencies sector more broadly — as the US passes the GENIUS Act and other jurisdictions around the world move forward with crypto regimes aimed at creating workable regulatory models, including leveraging stablecoins to their fullest extent.
3. Corporates divesting non-core assets: Globally, the pressure to cut costs may see corporates continuing to put a laser focus on their core assets and divesting themselves of underperforming assets and business units.
4. Interest in the use of AI agents to enable efficiencies growing very rapidly: AI will likely continue to be a big bet across the fintech sector, although there is expected to be significant growth in interest as it relates to the development and use of AI agents — particularly in areas like financial crime and fraud, operational processing, frontline enablement and regtech.
5. Jurisdictions reevaluating and simplifying regulatory regimes in order to increase competitiveness: As the US embraces a softer approach towards regulation, other jurisdictions are looking at their regulations and considering methods to simplify them without affecting consumer protections.

Footnotes

1 Next. "ERGO gains access to the U.S. market with the full acquisition of NEXT Insurance" 20 March 2025.

2 Morningstar. "BlackRock's $3.2 Billion Acquisition of Data Provider Preqin Cleared by U.K. Regulator," 12 February 2025.

3 PE Hub. "Bridgepoint wraps up tender offer for Esker alongside General Atlantic," 5 February 2025.

4 Reuters. "Japan's MUFG to spend over $660 million to buy robo-adviser WealthNavi," 29 November 2024.

5 Reuters. "Stablecoin giant Circle's shares surge in blowout NYSE debut," 5 June 2025.

6 Pitchbook. "PitchBook Analyst Note: Fintech's AI Premium" 17 July 2025.

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