UAE’s fintech sector ranks 6th, bucks global funding downturn

UAE’s fintech sector ranks 6th, bucks global funding downturn

Published: Thu 11 Jan 2024, 3:29 PM

The UAE’s fintech sector bucked a global downward investment trend, ranking sixth globally and recording a 92 per cent jump in 2023 on the back of fintech-friendly regulations and growing adoption of digital banking and other tools in the region, according to data made available by Innovate Finance.

While global investments in financial technology companies saw a significant decline in 2023, falling 48 per cent to $51.2 billion from the previous year's $99 billion, the UAE demonstrated a contrasting trend, with fintech funding nearly doubling in the past year.

Major fintech hubs like the UK and the US followed the global trends amid economic challenges, with concerns over inflation, tight monetary policies, and potential recession impacting spending and deals. Despite this, early stage fintech investment remained robust, garnering over $4 billion in seed funding, Innovate Finance said.

Worldwide, the fintech industry cautiously entered 2023. However, larger deals above $100 million slowed, indicating a shift in growth-stage valuations and capital issuance caution. The average deal size dropped to $12.9 million from $15.5 million in 2022, yet exceeded the 2012-2020 average of $10.3 million. Demonstrating its international influence, fintech saw a notable shift in investment trends: for the first