U.S. venture capital investment in fintech companies rose to $1.2 billion in the first quarter, the highest activity since last year’s first quarter, according to KPMG International’s Pulse of Fintech report, released Thursday.
Non-VC fintech investment in the U.S. reached $300 million, resulting in a total of $1.5 billion in fintech investment in the U.S. for the quarter.
“The U.S. leads the rest of the world in the total value of fintech investment due to the large amount of funds available to invest in the market, with investors focusing on late-stage, clear front-runner fintech companies,” said Anthony Rjeily, KPMG’s U.S. financial services fintech practice co-leader, said in a statement.
Wealth management is experiencing the effects of sundry innovations in technology and perception shifts.
In Europe, fintech venture activity in the first quarter soared to its highest tally in years at $610 million, thanks to several huge rounds, KPMG reported.
Globally, fintech investment sagged, with total global investments at $3.2 billion, down from $4.2 billion last quarter. Though not a steep drop, it was well below earlier outlier quarters, the report said.
Global fintech M&A dropped to $920 million in deal volume in the first quarter, down from $1.8 billion in the fourth quarter, and less than half the $4 billion in funding in the first three months of 2016.
In terms of volume, the report said venture financing now appeared to be oscillating around early 2014 or full-year 2013 levels, after falling from 2015 peaks. However, at $2.3 billion, venture capital investment remained on the historically high end in the first quarter.
According to the report, the global market is experiencing growth in the breadth of fintech technologies and applications.
“Payments and lending continue to attract the most funding globally, although we’re seeing increasing interest in a variety of technologies,” Brian Hughes, national co-lead partner in KPMG U.S. venture capital practice, said in the statement.
“In addition to continued growth in regtech and insurtech, areas such as artificial intelligence, machine learning and Internet of Things are gaining increasing investor attention.”