The biannual report from KPMG, Pulse of FinTech H2'23, shows that Irish fintechs attracted just $60.83m in 2023 compared to more than $1bn raised in the previous year.

Furthermore, the number of deals also reduced with just 11 transactions and investments in 2023, compared to 22 in 20222.

Even more concerning is the fact that the vast majority of investment in 2023 was taken up by one deal – the $53 million raised by payments company NomuPay.

The Irish decline comes amid a six-year low in global investment in the fintech sector – from $196.6bn across 7,515 deals in 2022 to $113.7bn across 4,547 deals in 2023.

It also comes six months after another report by banking lobby group ibec found that almost three-quarters of Irish fintech startups cited a lack of state support as a major barrier to growth and innovaiton.

Despite the figures, there remains some optimism in the resilience of Ireland’s fintech sector and the likelihood of a recovery once market conditions stabilise.

“There are still plenty of opportunities for disruptors, especially within regtech, payments, insurtech and wealthtech,” said Ian Nelson, head of financial services at KPMG in Ireland.

The report makes a number of forecasts for the remainder of 2024, including a revival in M&A activity in the payments market; a focus on AI and enterprise solutions; and opportunities from tokenisation, ESG and the evolving regulatory requirements facing firms.

"As outlined in the Ireland for Finance Action Plan 2023, FinTech and digital finance have continued to grow in importance in Ireland and are becoming a strong driver of employment growth,” said Nelson.

“But finding the balance between regulating FinTechs and supporting innovation will remain tricky."