Funding levels in Ireland’s fintech sector have fallen again in the last 12 months due to economic and geopolitical challenges.
According to data from KPMG, there were nine fintech investment deals completed in the first half of 2023, raising a total of $59.2m.
However, while there was the same the number of deals in the first half of 2022, the value was significantly higher at $742m.
A big contributor to the disparity was the massive $676m investment made in 2022 by JP Morgan in Cork-based fintech Global Shares.
Nevertheless, the KPMG report cites the impact of rising interest rates and inflation, the ongoing war in Ukraine and escalating geopolitical tensions as contributing factors.
Venture capital (VC) funding in Ireland has also declined this year, the value of deals between April and June fell by 17% compared to the same period in 2022.
Ireland’s investment malaise also mirrors global trends. The level of global VC investment has fallen for six consecutive quarters while global fintech funding in the first half of 2023 dropped to $52bn compared to $63bn for the same period in 2022.
According to KPMG’s head of financial services, Ian Nelson, Ireland’s fintech market should still be seen as robust, especially in areas like regtech, insutech, payments and wealthtech, where strong business cases are involved.
“We expect that funding will rebound when market conditions begin to even out, if not necessarily to the record level experienced in 2021,” he said.
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