Last Updated on September 10, 2026 by TMB
Fintech Investment in the EMEA (Europe, the Middle East, and Africa) region has significantly declined, according to a new report from British multinational professional services firm KPMG. The company said the plunge stemmed from several factors, causing a notable deviation from the momentum seen in other regions.
In the Pulse of FinTech H1 report, KPMG states that capital injections in the EMEA region’s fintech sector fell to $11.3 billion in the first half of 2026, from $18 billion in H2 2025, a reduction of more than 37%. Interestingly, the report states that the UK attracted the largest volume of deals for total fintech investment in the entire region, coming in at $2.5 billion across 205 deals. Germany brought in the second-largest amount at $1.6 billion over 36 deals, while the Middle East pulled in $1.4 billion in 50 deals. The African market sealed 44 deals and attracted $403 million in investment.
Reasons for the Reduction
KPMG wrote that geopolitical and economic uncertainty drove the decline recorded in H1 2026. Specifics mentioned include tariff changes in the US, uncertainty over interest rates and inflation, and the sudden outbreak of war in the Middle East. According to the report:
“These factors likely put an uncertainty on the sentiment of fintech investors across the region. In the UK, political changes and concerns about new wealth taxes also contributed to the lackluster investment.”
The report also highlighted a general focus on AI in the fintech sector. According to KPMG, EMEA investors are interested in AI-focused fintechs, especially in cybersecurity, digital identity, and regtech. However, this interest did not translate into significant funding because many of these AI-focused startups are small, especially compared with similar startups in other regions. This also means investments in these startups are smaller.
EMEA Fintech Insights
An insight in the report is the interest in cryptocurrencies, including stablecoins. EMEA investors are also interested in these, especially since the European Union introduced the MiCA (Markets in Crypto Assets) law, bringing regulatory clarity to crypto use in the region. However, a few concerns about the regulatory landscape for cryptocurrencies could still affect investor interest.
Overall, interest is growing in fintechs focused on instant payments, especially those using tokenization and stablecoins to achieve this goal. The report also states that competition and investment in this area will increase as the sector continues to mature and grow in popularity.
However, a Partner and Head of Fintech at KPMG in France predicts that the market will correct the number of startups in the industry. According to François Assada, many fintechs already offer banking and payments services. Assada believes many will fail because they provide similar solutions. The Partner’s prediction is that clear market leaders will rise and consolidation will increase, as large companies are already buying out distressed fintechs.
