Following a record year in deal volume and value, overall fintech investment in the U.S. remained strong but dipped during H1'19, reaching $18.3 billion across 470 deals, powered, in large part, by a strong first quarter of the year, according to KPMG's H1' 2019 Pulse of Fintech report.

The full report can be found at home.kpmg/fintechpulse.

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The $6.9 billion buyout of business analytics firm Dun & Bradstreet by a consortium of investors was the top fintech deal in the U.S. and globally during the first half of the year.

M&A activity was particularly strong in the first half of 2019, accounting for five of the top deals in the U.S. (i.e. Investment Technology Group: $1 billion; CSI Enterprises: $600 million; PIEtech: $500 million; IQMS: $425 million; and Viteos Fund Services: $330 million).

"U.S. fintech investment is strong this year, and with several large M&A deals announced, it's only going to grow," said Robert Ruark, Financial Services Strategy and Fintech leader, KPMG LLP. "The payments space continues to be hot, demonstrating there's plenty of long-term growth potential in the sector, including verticals like healthcare payments."

Fintech-focused Venture Capital (VC) investment reached a record level in the U.S. during Q2'19, bolstered by $300 million funding rounds to Carta and Affirm.

The report suggests that despite the dip in H1'19, fintech investment in the US is poised to see record-breaking highs in the second half of the year. Three massive M&A deals were announced in H1'19, including Fiserv's acquisition of First Data ($22 billion), Fidelity's acquisition of Worldpay ($43 billion), and the merger of Global Payments with Total System Services ($21.5 billion). These deals, if they close in H2'19 as expected, could propel both the U.S. and global fintech investment into new highs.

Insurtech slows while wealthtech grows during the first half of 2019

Investment in insurtech saw a slowdown during the first half of the year, which could reflect the increased focus on consolidation in other parts of the insurance industry. The report suggests there should be renewed interest in the space once consolidation settles down. Wealthtech gained traction during H1'19 as companies worked to develop scale and product diversity.

Trends to watch in H2' 2019

The report says the payments space is expected to be a key area of focus for investors, along with B2B services. Security will also likely be a hot area, and online gaming could also see growth.