UAE's Fintech Sector Ranks 6th place in Global Ranking with a 92% Surge - Smart Zones® UAE
Business Strategy

UAE’s Fintech Sector Ranks 6th place in global ranking with a remarkable 92% surge

In the face of a global downturn in financial technology investments in 2023, the UAE’s fintech sector defied the trend, securing a sixth-place global ranking and experiencing a remarkable 92% surge. This growth was attributed to the region’s fintech-friendly regulations and the increasing adoption of digital banking and related tools, as reported by Innovate Finance.

While global investments in financial technology companies plummeted by 48% to $51.2 billion in 2023 from the previous year’s $99 billion, the UAE exhibited a contrasting trajectory, with fintech funding nearly doubling over the past year.

Despite economic challenges affecting major fintech hubs like the UK and the US, leading to concerns about inflation, tight monetary policies, and potential recession impacting spending and deals, early-stage fintech investment remained resilient, attracting over $4 billion in seed funding, according to Innovate Finance.

On a global scale, the fintech industry approached 2023 cautiously. Larger deals exceeding $100 million slowed, signaling a shift in growth-stage valuations and increased caution in capital issuance. The average deal size decreased to $12.9 million from $15.5 million in 2022 but surpassed the 2012-2020 average of $10.3 million. Notably, for the first time, Asian countries in the Top 10 outpaced their European counterparts in fintech investment trends. In 2023, the UAE made its debut in the top 10 list of the most well-funded fintech hubs, according to Innovate Finance.

With the Middle East, particularly the UAE, becoming increasingly attractive to financial sector companies, including cryptocurrency exchanges and FX/CFD brokers, the UAE’s efforts to position itself as a crypto and financial hub are evident. The country offers more business-friendly regulations to companies entering this market compared to other major jurisdictions.

According to the ranking, the US claimed the top spot with 1,530 deals valued at $24.2 billion, followed by the UK with 409 deals totaling $5.1 billion. Other countries in the top 10 included India, Singapore, China, France, Germany, Hong Kong, and Canada.

Innovate Finance highlighted that the UK, the second-largest fintech investment hub in 2023, experienced a significant decline, with total funding for the country’s financial technology industry reaching $5.1 billion, down 63% from $13.9 billion in 2022.

The top five biggest global deals in 2023, with a combined value of over $9 billion (approximately 18% of total global investment in the sector), were led by Stripe, which secured $6.9 billion. Rapyd, Xpansiv, BharatPe, and Ledger followed with the second to fifth-largest investment deals, respectively.


Publish 11 Jan 2024


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