Fintech M&A Trends 2024: Where the Deals Are Getting Done

Fintech M&A in 2024 is not the frothy, valuation-insensitive market of 2021. It is more disciplined, more strategic, and in many ways more interesting. The buyers who are active now are building for the long term, and the transactions getting done reflect a clear-eyed view of where durable value sits in the fintech stack.

The fintech valuation reset of 2022 and 2023 was painful for founders and early investors who had marked portfolios to peak multiples. For acquirers, it has been a different story. Businesses that were priced at 15 to 20x revenue in 2021 are now transacting at 4 to 8x, and in some cases lower. The underlying fundamentals in many cases have not deteriorated materially. What changed was the cost of capital and the appetite for speculative premium.

This creates a structural opportunity for strategic acquirers and well-capitalised private equity buyers who can move decisively. The window will not stay open indefinitely. As interest rates normalise and confidence returns to growth markets, valuations will recover. The buyers who act in the current environment will look back at this period as a vintage acquisition cycle.

Payments infrastructure remains the most active segment of fintech M&A. The economics are compelling: high transaction volumes, recurring revenue, and network effects that reward scale. The strategic logic for consolidation is straightforward. A payments processor with broader geographic coverage, more payment method support, and deeper merchant relationships is worth materially more than the sum of its parts.

The specific sub-segments attracting the most attention are cross-border payment rails, merchant acquiring in underserved markets, and embedded payment infrastructure for vertical SaaS platforms. Acquirers are looking for businesses with proprietary technology, direct banking relationships, and a regulatory footprint that is difficult to replicate organically.

• Cross-border rails: Businesses with proprietary corridors into high-growth markets command significant premiums from both strategic and financial buyers
• Merchant acquiring: Vertical-specific acquirers with deep integrations into specific industries are more defensible than horizontal players
• Embedded payments: SaaS platforms with payment monetisation are increasingly attractive acquisition targets for larger payments groups
• Crypto on/off ramps: Regulated fiat-to-crypto infrastructure is in high demand from both traditional payments companies and digital asset platforms

The embedded finance narrative of 2020 to 2022 generated significant venture investment and a proliferation of infrastructure providers. The market is now consolidating. Many of the infrastructure-layer businesses that raised at elevated valuations are facing a choice: find a strategic acquirer, merge with a competitor, or face a down round.

For acquirers, this creates access to technology and talent that would have been unavailable at any price two years ago. The businesses worth acquiring are those with genuine distribution, proven unit economics, and technology that is genuinely differentiated. The businesses to avoid are those whose value proposition was primarily narrative rather than commercial.

The neobank sector has bifurcated sharply. A small number of well-capitalised operators have achieved profitability and are now in a position to acquire. The majority are burning cash and facing difficult conversations with their investors. This dynamic is producing a wave of distressed and semi-distressed M&A activity in the sector.

Digital lending businesses face a different set of pressures. Rising funding costs have compressed margins, and credit quality deterioration in some portfolios has created impairment risk. Acquirers are being highly selective, focusing on businesses with low-cost deposit funding, strong credit risk models, and exposure to asset classes that perform well in a higher-rate environment.

One of the clearest trends in 2024 fintech M&A is the premium being placed on regulatory licences. In an environment where regulators globally are tightening oversight of financial services, the cost and time required to obtain licences in key jurisdictions has increased significantly. This makes licenced businesses more valuable to acquirers who need market access quickly.

The most sought-after licences are those that provide access to large, regulated markets: EMI licences in the EU, banking licences in Singapore and the UK, money transmitter licences in the US, and payment institution licences in Australia. Businesses holding these licences are commanding premiums that reflect not just their current revenue but the optionality their regulatory status provides.

The profile of the ideal fintech acquisition target in 2024 is different from 2021. Growth at any cost is no longer the primary criterion. Buyers are focused on businesses that demonstrate a credible path to profitability, have defensible competitive positioning, and carry manageable regulatory and operational risk.

• Recurring, predictable revenue with low customer concentration
• Regulatory licences in key jurisdictions that are transferable on change of control
• Proprietary technology with genuine differentiation, not just a wrapper on third-party infrastructure
• Unit economics that improve with scale, not deteriorate
• Clean compliance history with no material regulatory actions or pending investigations
• Management teams willing to remain post-acquisition for a defined transition period

The fintech M&A market in 2024 is more selective than the previous cycle but more rational. The transactions getting done are creating genuine strategic value rather than simply deploying capital at peak multiples. For founders who built strong businesses during the growth cycle, the current environment rewards those who can demonstrate commercial substance over narrative.

Acquiry is actively Facilitating fintech M&A mandates across payments, embedded finance, digital banking, and regulatory technology. If you are considering an acquisition or exploring exit options, contact our transaction team to discuss your mandate.

Acquiry facilitates fintech M&A transactions across payments, embedded finance, digital banking, and regulatory technology. Buy-side and sell-side mandates executed with precision and discretion.

For buyers

• The current valuation environment offers access to fintech businesses at 4-8x revenue, well below 2021 peak multiples, but the window is likely to close as interest rates normalise and confidence returns.
• Regulatory licences in key jurisdictions should be treated as strategic assets in their own right, not merely as compliance overhead, given the time and cost now required to obtain them organically.
• In digital lending, selectivity is essential: focus on businesses with low-cost deposit funding, strong credit risk models, and exposure to asset classes suited to a higher-rate environment.

For sellers

• Founders who can demonstrate commercial substance, including proven unit economics and defensible competitive positioning, are better placed than those whose value proposition rests primarily on narrative.
• Holding a transferable regulatory licence in a major jurisdiction materially strengthens a seller's negotiating position, as acquirers are paying premiums that go beyond current revenue to reflect future optionality.
• Neobanks and embedded finance providers facing investor pressure should consider a strategic sale now rather than risk a down round, given that acquirers currently have access to technology and talent that would have been unavailable at any price two years ago.

Acquiry runs buy-side and sell-side mandates for digital businesses. We are not limited to the sectors or markets covered here: any sector, any market, bring it to us anyway. Start a mandate (opens in a new tab).