After a brief but noticeable decline during the COVID pandemic, fintech investments are booming again, and countries all over the world are experiencing a big influx of capital in fintech ventures.

Although the United States and the United Kingdom receive the majority of fintech financing, smaller countries, notably in Asia, are increasingly making their influence felt.

This isn't surprising, given that Asia has the highest fintech adoption rate in the world. According to a recent research, overall investments in privately held fintech companies based in Asia-Pacific increased by 68 percent sequentially to $5.47 billion in the third quarter of 2021, setting a new quarterly high since the first quarter of 2019.

Total fintech fundraising worldwide hit $98 billion in the first half of 2021, according to KPMG, with 2,456 deals, rebounding significantly from the COVID-inspired investing drop of 2020. The United States, not surprisingly, accounted for the majority of the entire investment, at $42 billion. Fintech funding, on the other hand, has recovered well in Asia and the EMEA region.

Despite the paucity of notable major acquisitions, Asian fintech fundraising activity reached $7.5 billion in the first half of 2021. According to CBInsights, Asian fintech funding in Q3 was approximately $6 billion, second only to the United States.

With $5.94 billion raised across 236 agreements in 2021, India held its lead in Asia-Pacific fintech investments. In addition, the country received the highest money in 2020, with $1.50 billion raised over 118 transactions.

According to S&P Global Market Intelligence's 'APAC Fintech Funding Report,' venture capital investments in Asia-Pacific fintechs reached a record high of $15.69 billion in 2021, more than doubling the previous year's total of $5.87 billion.

Payment companies in India drew in the most money, accounting for 45 percent of total transaction value in 2021.

The top three fundraisers in 2021 were India-based payment intermediaries that enable online and offline retailers to accept various payment methods, with each firm closing numerous investment rounds during the year.

Pine Labs raised $700 million in two rounds of funding, Razorpay Software raised $535 million in three rounds of funding, and Resilient Innovations, which operates as BharatPe, raised $477 million in two equity rounds.

Pine Labs raised a total of $700 million in two rounds of funding in 2021. The initial $600 million was raised in July 2021, with Fidelity, Blackrock, and other investors leading the way at a $3 billion value.

In September 2021, the company announced that it has raised an additional $100 million from Invesco, a US-based investment management firm. The Invesco Developing Markets Fund was used to make the investment.

Sequoia Capital, Temasek Holdings, Actis, PayPal, and Mastercard, among others, have invested in the company, which provides merchant payment, point-of-sale, and Buy Now Pay Later (BNPL) solutions.

Recently, Razorpay announced that it has raised $375 million in its Series F round of fundraising, valued at $7.5 billion, which is more than it has raised in all of its prior rounds combined. This is also more than quadruple its previous valuation of $3 billion, which it achieved in April of this year, highlighting the tremendous momentum in the funding environment.

BharatPe had a market capitalization of almost $900 million in 2020. The secondary component of the $370 million is $20 million, allowing its angel investors and staff to cash out. As the investment frenzy in India's startup sector continues, Bharatpe has secured $370 million in its Series E round led by Tiger Global, making it the latest entrant to the unicorn club.

The 2021 figure was similarly a 74% increase over pre-pandemic levels in 2019.
"While huge rounds of at least $100 million accounted for approximately 54% of total transaction value in 2021," according to the research, "a spike in deal activity also contributed to the surge in aggregate amount raised."

In Asia-Pacific, fintechs closed 754 agreements in 2021, up 81% and 49% from 2020 and 2019, respectively. Fintech firms in Southeast Asia made $4.7 billion in 217 transactions, up from $1.13 billion in 118 transactions the previous year, according to the statistics.

As imminent interest rate hikes and accompanying stock market volatility cloud the outlook for IPOs, private markets will continue to be a critical source of financing for fintechs in 2022, according to the analysis.

"While we believe that venture capitalists are likely to remain invested in the fintech space, the uncertain market conditions may nudge them toward mature fintechs that have demonstrated financial discipline," it added.

Investors showed renewed interest in firms operating in the areas of InsurTech, WealthTech, neobanks, and financial technology enablers in Q3 of CY21 alone, investing $2.5 billion in 53 concluded agreements across various phases of investment.

Because of the increased usage of digital payments, the payment sector received the greatest financing. The fastest-growing industries this year were technology and cryptocurrencies, which came in second and third, respectively.

Payment fintechs continue to attract the lion's share of fintech funding in Asia-Pacific, according to a recent research from S&P Global Market Intelligence.

Slice, a credit card rival, announced that it had raised $220 million to become a unicorn, bringing the country's fintech market, particularly the payments sector, back into the spotlight.

Fintechs, particularly in the payments industry, have been on a fund-raising frenzy as a result of fresh technologies and a large untapped market, despite the fact that some businesses have had mixed results when launching on bourses.