Investment in fintech anticipated to have a soft start in 2024
3 min
Global fintech investment witnessed a slowdown as investors worldwide chose to preserve their funds. Pulse of Fintech H2’23, KPMG’s bi-annual publication surrounding global fintech investment trends, found that fintech investments dropped from US$196.6b across 7,515 deals in 2022 to US$113.7b across 4,547 deals in 2023. The report highlighted that while 2023 was a challenging year for the fintech market overall, it was a combination of geopolitical events, high interest rates and the parched exit environment that drove the downturn.
Much like global, fintech investment in the Europe, Middle East, and Africa (EMEA) region dropped to a seven-year low of US$24.5b across 1,514 deals in 2023, compared to the US$49.6b across 2,478 deals in 2022. However, the region’s fintech market displayed robust geographic diversity as fintechs from seven different countries represented the top ten deals in the region, with the United Arab Emirates’ Tabby (US$950m) and Haqqex (US$400m) being among the standouts.
Commenting on the outlook for fintech investment in Kuwait, Ankul Aggarwal, Partner and Head of Deal Advisory, KPMG in Kuwait, said, “Kuwait’s fintech sector is rapidly catching up with the global markets and witnessing an increase in the industry participants such as digital payments facilitators, insurtech, and P2P platforms, among others.
The Central Bank of Kuwait (CBK) has created an enabling environment for fintech innovation, implementing a range of initiatives, such as updated e-payment regulations and digital banking guidelines. Additionally, CBK is also working towards an open banking framework.”
According to the report, H1’24 in the EMEA region will see a growing focus on embedded finance and banking offerings, adoption of the Buy Now Pay Later (BNPL) model, consolidation within the BNPL space, asset tokenization, and artificial intelligence (AI) based solutions around fraud prevention and customer services.
Ankul further added, “In Kuwait, largely, fintech companies are focusing on the unbanked and underbanked segments of the market to carve a niche for themselves and offering related solutions, while traditional banks are moving towards adopting value-added solutions approach focusing on embedded finance and banking offerings.”
On a sectoral level, proptech and ESG proved to be hotbeds for investors with proptech-based investment reaching an all-time high of US$13.4b globally. According to the report, 2023 was the second-best year in terms of ESG fintech investment as it doubled to reach US$2.3b year-over-year (YOY). Given the ongoing regulatory changes and ambitious net zero commitments displayed by governments and businesses, it is likely that ESG-focused fintech solutions will chart an upward trend heading into 2024.
Moreover, investor interest in AI continued to peak in the fintech market as AI-driven fintech companies accounted for US$12.1b in investment in 2023. The report underlines that while this reflects a decline in funding compared to the US$28.1b in 2022, it does not demonstrate falling interest in the space, given many financial organizations and fintechs adopted AI through alliances and product spend instead of doing it through direct investment.
Here are some of the other highlights that emerged from the report:
- The Americas attracted US$78.3b across 2,136 deals in 2023 — of which the US accounted for US$73.5b across 1,734 deals — while the EMEA region attracted US$24.5b across 1,514 deals, and the ASPAC region attracted US$10.8b across 882 deals.
- Global M&A deal value dropped from US$98.2b in 2022 to US$56.4b in 2023; global venture capital (VC) investment declined from US$88.8 billion to US$46.3 billion year-over-year. Private equity (PE) growth investment showed the most resilience, up from US$9.6b in 2022 to US$11b in 2023.
- Payments remained the strongest area of fintech investment globally in 2023, with US$20.7b in investment compared to US$58b in 2022; 2023 investment in other notable sectors included proptech (US$13.4b), insurtech (US$8.1b), crypto and blockchain (US$7.5b), regtech (US$2.6b), ESG fintech (US$2.3b), and cybersecurity (US$1.3b)
- Corporate-participating VC investment globally fell from US$45.9b in 2022 to US$25.2b in 2023.
The biannual analysis anticipates fintech investment to remain slow heading into the first quarter of 2024, helmed by ongoing global conflicts, surging interest rates, and the continued lack of exits. The expectation is as interest rates stabilize, and potentially decline, AI and B2B (business-to-business) solutions will likely emerge as a top priority for investors. The report predicts that mergers and acquisitions (M&A) activity could also rebound as investors begin to look more closely at distressed assets.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Compliance with these deadlines is crucial to avoid administrative penalties.
2 min
The UAE’s Federal Tax Authority (FTA) is urging Corporate Taxpayers to adhere to submission deadlines to avoid fines. Specifically, Resident Juridical Persons with licenses issued in May (regardless of the year) must submit their Corporate Tax registration applications by July 31, 2024, in line with Federal Tax Authority Decision No. 3 of 2024.
This decision aligns with the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments, effective from March 1, 2024. The FTA stresses the importance of meeting these registration deadlines, which have been communicated through various media channels and direct outreach to registered company owners in the UAE.
Utilizing the EmaraTax Platform
Compliance with these deadlines is crucial to avoid administrative penalties. The deadlines apply to both juridical and natural persons, including Resident and Non-Resident Persons in the UAE. Detailed information on these deadlines and other relevant issuances can be found on the FTA’s official website.
According to the FTA’s Public Clarification, Resident Juridical Persons established or recognized before March 1, 2024, must submit their tax registration applications based on the month their license was issued. Those with expired licenses as of March 1, 2024, should submit their applications based on the original issuance month. For those holding multiple licenses, the earliest issuance date applies.
Administrative penalties for corporate tax violations have been in effect since August 1, 2023. To facilitate the registration process, taxpayers must use the “EmaraTax” digital platform, available 24/7, or seek assistance from accredited tax agents and government service centers.
The FTA has also emphasized the importance of providing accurate information and submitting updated supporting documents correctly with the electronic registration application, noting that registering for Corporate Tax for a juridical person requires uploading various documents, including the commercial license, the Emirates ID card, the passport of the authorized signatory, and proof of authorization for the authorized signatory.
A comprehensive video explaining the registration process through the “EmaraTax” platform is available on the FTA’s website. This platform, designed according to international best practices, aims to streamline the registration journey, submission of periodic returns, and payment of due taxes for all UAE taxpayers.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
