Irish financial technology (fintech) companies have seen a surge in financial activity in the first half of 2020, according to new figures from KPMG.
Eight deals resulted in €278m being exchanged in mergers and acquisitions, venture capital funding rounds and private equity transactions between January and June.
This is already more than double the value of comparable transactions (€132m) in the Irish fintech sector for the entire year in 2019, despite only being half the number of deals (14) during that period last year.
The new figures follow a trend showing a surge in investment in the wider tech and biotech sectors in Ireland.
This week, the Irish Venture Capital Association published figures indicating that Irish tech funding is set to exceed €1bn this year with local firms increasingly seeing cash investors ready to sign funding deals of over €10m.
The KPMG figures point to the €149m acquisition of Irish-founded Prepaid Financial Services by Australia’s EML Payments as the largest “strategic” fintech M&A deal globally for the period. The deal had been announced in November 2019 at a price of €253m but was renegotiated at a discount of €105m against the background of the global coronavirus pandemic.
The KPMG report lists other notable deals in Ireland over the period including a €71m joint venture acquisition of Payzone Ireland by AIB and First Data and a €73m funding round by client lifecycle management company, Fenergo.
The Irish figures compare favourably to global activity, where fintech funding fell sharply during the first half of 2020 with €21.7bn in total fintech invested across 1,221 deals. A sharp drop in M&A investment drove most of the decline globally, KPMG reports, with M&A accounting for just €3.4bn of fintech investment, compared to €72.5bn in the second half of 2019.
“The sizeable deals secured by Prepaid Financial Services, Payzone and Fenergo have been a huge boost for Ireland’s fintech ecosystem this year,” said Anna Scally, partner and fintech Lead at KPMG in Ireland.
“I expect interest and investment in Irish fintechs to remain hot into the second half of the year, particularly as British and global fintechs work to ensure they are able to service their customers across Europe in the wake of Brexit. Ireland’s attractiveness as a place for global fintechs to do business also remains strong, with Mastercard announcing plans to grow its European technology hub on a new campus site in Leopardstown earlier this year.”