A reduction in FinTech transaction volumes in 2016 suggests that early hype has been replaced with cautious investment in proven and more established technologies and businesses, according to a market report from technology M&A advisory firm Hampleton Partners.
The Fintech M&A report, which covers mergers and acquisitions in the period between July 2014 and December 2016, shows deal values for the first half of 2016 were down 32 per cent from the previous half year.
Deals were driven by acquirers looking to build scale, as well as the opportunity to enhance or replace in-house legacy systems. Hampleton also believes that CBOE Holdings’ $3.2 billion offer for Bats is the latest sign of a push towards global consolidation in the exchanges sector.
Miro Parizek, Hampleton managing partner, says: “Going forward, Hampleton believes that the FinTech M&A marketplace will remain consistent, continuing to deliver attractive multiples for sellers. Despite wider concerns surrounding Brexit and other geopolitical issues, London will remain an investment hotspot for FinTech assets with investment activity driven by the three forces of consolidation, compliance and disruption.”