Some Stats on Fintech M&A Activity

Fintech has long been thought of as the future of banking, and recent exit events have signaled that financial services firms are willing to pay a heavy premium to not be left behind.

To summarize Mercer Capital’s quarterly report, the number of deals is slightly down but deal value is way up. In fact, total reported deal value for the quarter was $87.437B with the median deal size around $123M, a 210% increase from 2016. B2B technology and solutions largely drove this increase as median deal value for each was up over 200% from 2016 levels. Median exit for payments services decreased but still the median deal size was $149M.

It is too early to definitively say if companies overpaid for these deals, yet average deal value over revenue has increased 75% in just two years.

If we can correlate anything from these statistics, it is that interest in the fintech space remains high. Regulatory uncertainty, increased competition, and continuing technological change are just some of the factors to continually consider looking at these firms as M&A targets. If the stats above are any indicator, it seems that buyers do not consider any of these threats very seriously.

I believe that 2018 marked the end up the maturation stage for financial technology firms. We are now 10 years removed from the Financial Crisis, and by now all financial services firms have acknowledged that they must adapt to younger, tech-savvy customers. As fintech graduates past its puberty stage, we enter the partnership and implementation stage. I am confident that the toughest hurdles have already been passed; I can’t wait to see what the future brings.