Slide Presentation
19 Apr 2024
A cautious but optimistic sentiment is prevailing in the Fintech and Payment sector. Despite a subdued start in 1Q 2024, investors anticipate an uptick in M&A deal flow throughout 2024. General Commentary & Highlights Global: Fintech M&A and Fundraising Poised for a Rebound from Q1 2024 Deal volume of global fintech M&A deals remained subdued in Q1, with the number of deals dropping 15% in 1Q 2024 (compared to 1Q 2023). We expect an acceleration of deal activity through 2024 and we are already seeing evidence of this acceleration in North America and Europe. North America: Evidencing Expanded Fintech Deal Flows in Q1 '24 North America rebounding from a market low in fintech deal activity in Dec 2024. We expect growth momentum established in Q1 to continue through 2024 culminating in growth vs. 2023. Europe: Also Showing Signs of Rebound with Q1 Ramping up from 2023 Trough 2024 deal activity trending on similar levels to 2023. But we expect an acceleration of activity in rest of 2024 as buyers and sellers align to a new normal of valuation. APAC: Fintech M&A Remains Somewhat Subdued Thus Far in 2024 Fintech M&A deal activity remains subdued in the Asia Pacific, including a 25% decline in number of transactions in Q1 2024 vs. 2023. China macro challenges expected to drive ongoing conservatism in this market, although markets such as Japan could see an increase in deal activity. LATAM & MEA: Fintech M&A Remain Subdued, Facing More Macro-Headwinds Fintech in rest of the world (LATAM and MEA regions) is muted by macro headwinds including political instability and armed conflict, which is likely to continue in 2024. But the attractive fundamentals of these high-growth markets remains and a return to higher deal volumes will come quickly if the market reaches greater stability. Fintech Deal of the Quarter: Capital One Acquires Discover Capital One + Discover will become the largest credit card issuer in the US market, accounting for 19% of the US credit card market. The acquisition will generate expense synergies of ~$1.5B in operating expenses and ~$1.2B in network expenses by 2027. The acquisition will drive cost of funding efficiency, cross-selling opportunity, and create an appealing opportunity for innovation by owning a national payment network that also has a strong international presence. Please do not hesitate to contact Yuriy Kostenko at Yuriy@FlagshipAP.com or Alessandro Mighetto at Alessandro@FlagshipAP.com with comments or questions.
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