After a prolonged downturn across venture capital markets, fintech investment showed clear signs of recovery last year, according to KPMG’s Pulse of Fintech H2 2025 report.
Global fintech funding climbed from $95.5 billion in 2024 to $116 billion in 2025, signalling that investor confidence began to return – albeit rather cautiously.
But, while the headline numbers suggest that momentum is back, the report also makes it clear that fintech isn’t simply returning to its boom-era playbook.
Rather, 2025 marked the start of a more selective funding environment, where investors were willing to write big cheques, but only for companies that were seen as durable, scalable and strategically important. There’s big money available, but investors are being more selective.
So, for startups heading into 2026, the message is mixed: capital is flowing again, but competition for it is tighter than ever.
Bigger Investment Totals, But Fewer Deals
One of the most striking themes in the report is that fintech funding rose last year even as deal volume fell sharply – an interesting shift, to say the least. While total investment reached $116 billion, the number of fintech deals globally dropped to approximately 4,719, an eight-year low.
This means that more money was invested but in fewer companies – that is, investors are no longer spreading capital across the market in the way they once did. Instead, they’re concentrating funding into fewer businesses, often those with stronger market traction or infrastructure-level relevance.
Regionally, the Americas remained the largest fintech market, attracting approximately $66.5 billion in total investment in 2025. EMEA followed with $29.2 billion, while Asia-Pacific trailed at $9.3 billion, according to KPMG.
The report also highlights that mega-deals played a major role in boosting global totals – more so than ever before. Among the biggest was Revolut’s $3 billion VC raise, reinforcing that later-stage fintech leaders can still attract significant backing even in a cautious climate.
Digital Assets Made a Major Comeback In 2025
Another major shift in 2025 was the return of investor enthusiasm for digital assets. According to the report, digital asset investment surged from $11.2 billion in 2024 to approximately $19.1 billion in 2025, nearly doubling year-on-year.
KPMG suggests that this renewed interest is being driven by improving regulatory clarity in key markets, particularly Europe and the US. Rather than fuelling speculative hype, much of the investment appears to be directed toward more mature opportunities, including platforms, infrastructure and compliance solutions. That is, you don’t necessarily have to be a fresh, shiny and exciting new startup to bring in big investment!
By the end of 2025, digital assets were no longer being treated as a niche fintech category, but rather, as an increasingly serious component of the wider financial ecosystem.
AI Continued to Dominate the Fintech Narrative
AI was another defining investment driver in 2025. KPMG reports that AI-focused fintech companies raised approximately $16.8 billion last year, up from $12.1 billion the year before.
The report indicates that investors are increasingly prioritising companies that can apply AI to real financial problems, particularly in areas like fraud detection, risk modelling, automation and customer service efficiency.
However, the broader trend suggests that simply being “AI-powered” is no longer enough, and this is unsurprising, as we’ve seen this sentiment echoed across many (if not most) industries in recent months. As the market matures, fintech startups are expected to show measurable results, stronger defensibility and clearer paths to profitability.
Heading into 2026, AI remains a powerful funding magnet, there’s no doubt about it, but only for companies with tangible execution. Because at the end of the day, big ideas are great and exciting, but they mean nothing if they don’t become a reality.
Payments Held Strong While Cybersecurity Fell Behind
KPMG’s report also highlights how uneven fintech recovery was across subsectors. According to the report, payments remained one of the most resilient segments in 2025, drawing approximately $19.2 billion across 542 deals. Indeed, B2B payments, in particular, continued to attract attention as investors looked for scalable infrastructure plays.
Insurtech also saw a meaningful rebound, with investment rising to around $8.6 billion in 2025, following a weaker 2024. Despite this increase, deal activity remained relatively subdued, suggesting that capital was once again concentrated in fewer, larger bets.
Fintech cybersecurity, however, moved in the opposite direction. According to the report, investment in this category fell to a seven-year low of $700 million, across just 72 deals – a very notable drop at a time when cyber threats continue to grow.
A Recovery, But Under New Rules
Overall, KPMG’s Pulse of Fintech H2 2025 report positions last year as a turning point. Global fintech investment rose, but the funding landscape became far more selective, shaped by investor caution and a growing emphasis on sustainable growth.
For fintech founders in 2026, the rebound in capital is encouraging, but it comes with a clear expectation shift. Investors appear less interested in rapid expansion at all costs, and more focused on startups that can build long-term value, especially in AI, payments infrastructure and regulated digital finance.
Fintech may be back on the rise, but the era of easy money looks firmly in the past.
