After three years of declining investment, the global fintech market rebounded last year, attracting $116 billion, a sharp rise from from $95.5 billion in 2024, according to KPMG’s latest Pulse of Fintech report.

The report found that while overall deal volume continued to decline, falling to an eight-year low of 4,719, the increase in total capital points to investors’ appetite for bigger deals, though taking a more selective approach about where they deploy their capital.

Investment activity remained relatively balanced over the year, with $56.3 billion deployed over the last six months of 2025, which KPMG said suggests momentum was sustained rather than front-loaded.

Fintech’s rebound was underpinned by strong growth in venture capital and M&A, even as private equity investment softened, with VC investment climbing to $56.7 billion, while global M&A value rose to $55.4 billion, driven by deals in the US ($27.5 billion) and EMEA ($11 billion).

The UK, meanwhile, retained its place as the largest fintech market across EMEA, though suffered a more than $2.3 billion decline in investment compared to 2024. Similar stories were seen across France and Germany, both of which also saw subdued activity, while the Nordics delivered a standout year, drawing $5.3 billion in fintech investment.

“After several years of contraction, fintech investment is clearly finding its footing again,” said Anton Ruddenklau, global lead for innovation and fintech for KPMG International.

“While deal volumes remain muted, the increase in capital deployed and the resurgence of exits signal growing investor confidence, particularly around scalable platforms in digital assets and AI.”

Digital assets emerged as a central focus for fintech investors in 2025, reflected in a sharp rise in investment for digital assets-focused startups, nearly doubling from $11.2 billion in 2024 to $19.1 billion in 2025.

While investment levels remained below the highs seen in 2021 and 2022, momentum was driven by a combination of factors, such as growing interest in stablecoins and increased regulatory clarity, particularly following the passage of the GENIUS Act in the US.

By comparison, the payments secret remained relatively stable over H2’25, drawing $19.2 billion, compared with $20.4 billion in 2024, though deal volume declined to 542 transactions, a nine-year low, as investors concentrate capital in proven, scaling payments platforms.

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Heading into 2026, KPMG found cautious optimism in the fintech market, with improving investment and exit conditions supporting renewed confidence. However, risks remain, including ongoing geopolitical tensions, the possibility of economic slowdown, and growing scrutiny around the sustainability of sky-high AI valuations.

“Looking ahead to 2026, the fintech sector is entering a more balanced phase, one defined by selective growth, clearer paths to profitability, and improving liquidity,” said Karim Haji, global head of financial services at KPMG International.

“While macroeconomic and geopolitical risks remain, the combination of stronger exit markets, greater regulatory clarity, and accelerating innovation provides a constructive foundation for sustained investment and long-term value creation.”