Fintech M&A: Acquiring a competitive edge in financial services

30 September 2019

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Mergermarket is pleased to present Fintech M&A: Acquiring a competitive edge in financial services, published in association with Ropes & Gray. This report takes the temperature of today’s fintech M&A market, including the pace at which deals are taking place, the key areas of focus, the challenges and opportunities identified by core market participants, and their expectations of what lies ahead.

Key findings from the report include:

  • Fintech M&A activity has accelerated but not peakedApproximately 5x more fintech deals were done in 2018 than in 2010. However, 92% of survey respondents expect this fintech activity to increase even further in the next year. 
  • Fintech deals are not without their challengesAll three of the respondent groups have encountered problems when completing fintech deals. 65% of fintech corporates have come up against regulatory approval issues in M&A. 61% of banks and other financial institutions say they found establishing valuations very difficult in their latest fintech deal. 67% of PE/VC investors say conducting thorough due diligence on intellectual property was very difficult in their latest deal.
  • Strategic acquirors are increasingly focusing on fintech deal-makingMore than 90% of fintech firms say they have purchased companies in the past two years and expect to buy another company in the next two years. Similarly, 72% of banks and other financial institutions expect to purchase a fintech company in the next two years. All fintech respondents stated that fintech M&A is either critical/transformative (79%) or very important (21%) to their overall business strategy.