Fintech and Insurtech Transactions by USA-Based Investors

Fintech and Insurtech Transactions by USA-Based Investors

Since 2020, over $568 billion has been invested in financial technology (fintech) and $33 billion in the insurance technology (insurtech) sectors by USA-based investors.

The convergence of finance and insurance with technology presents both unprecedented challenges and extraordinary opportunities. As these sectors continue to redefine traditional financial and insurance services, understanding the investment landscape becomes crucial for investors, industry players, and stakeholders. 

This report provides a comprehensive analysis of investment activity in the fintech and insurtech sectors by USA-based investors. The data set analyzed focuses on capital deployment, transaction types, geographical distribution, and investor preferences within the industry. By analyzing the data and trends from Q2 2020 to Q1 2023, this report reviews the dynamic landscape of fintech and insurtech investments, offering insights into market dynamics and growth opportunities.  

  • The fintech industry has received over $568 billion from USA-based investors over 13,616 transactions, with an average deal size of $41 million since Q2 2020.
  • The first quarter of 2022 saw the largest capital deployment of $102 billion in the sector over the period. Square, a California-based payment platform, significantly contributed to that by acquiring Australian-based Afterpay for $28 billion. 
  • From the fourth quarter of 2020 to Q1 2023, investment numbers have kept a steady pace, with Q3 of 2022 being the quietest quarter so far.
  • USA-based investors have focused heavily on domestic opportunities, deploying $353 billion (62%) within the United States, particularly in cities like New York, San Francisco, and Boston, known for their robust financial sectors and startup ecosystems.
  • The United Kingdom has received significant investment from USA-based investors, accounting for 10% of capital received in the sector, totaling $57 billion. This is due to the established financial markets and supportive regulatory environments.
  • Fintech markets in Asian countries like India (2%) and Singapore (2%) have attracted $11 billion from USA-based investors. These countries have witnessed rapid growth in their fintech ecosystems, increasing smartphone penetration, and rising demand for digital financial services.
  • USA-based investors deployed $193 billion through mergers and acquisitions within the fintech sector. Established companies enhance their market position, expand their product offerings, or gain a competitive advantage through domestic and international acquisitions.  
  • Venture capital investments contributed 14% of capital deployed by USA-based investors in the fintech sector over the period. The $80 billion deployed could illustrate the growth potential of the sector and the focus on disruptive technology.
  • USA-based private equity firms deployed $266 billion (47%) in fintech companies. These investments typically involve larger funding amounts and may target companies in later stages of growth.
  • The insurtech market has received $33 billion in the last three years, with a total of more than 900 transactions from USA-based investors. The average deal size in the period was $36 million.
  • The first quarter of 2021 saw the largest deal count and capital invested. Conforming to an insurtech briefing from Willis Towers Watson, the largest funding rounds included companies like Next Insurance, Coalition, Zego, Sidecar Health, Pie Insurance, Clarify Health, and Corvus Insurance.
  • As in 2020, the current insurtech market continues to see advancements in areas such as artificial intelligence, machine learning, or data analytics. The COVID-19 pandemic had a significant impact on the insurtech industry in 2020, driving the need for digital transformation and highlighting the importance of resilience within the insurance sector.
  • United States-based investors deployed $20 billion (62%) of the industry’s capital  markets investments, becoming a significant hub for insurtech investments.
  • Countries like India and Singapore have experienced a surge in insurtech investments The $3.4 billion (8% and 3% respectively) deployed among those two countries is due to the strong investment environment created by the region’s large population, growing middle class, and increasing digital adoption.
  • The United Kingdom and Germany contributed 10% and 4% respectively to the investment pool, receiving a total of $4.6 billion from USA-based investors.
  • Private equity firms have increasingly shown interest in the sector, investing $17.8 billion, contributing 54% of the total capital deployment.
  • Venture capital investments have been a major source of funding for insurtech startups. USA-based venture capital funds have deployed $5.3 billion in insurtech companies since Q2 2020.
  • Complete buyouts of insurtech companies have also been an active deal type in the market with a participation of $5.6 billion, particularly those businesses with a strong customer base and the potential for value creation.
The future of fintech and insurtech industries will be shaped by various factors, including technological advancements, market dynamics, and consumer preferences.
While the outlook is positive, it’s crucial for industry players to pay attention, adapt to changing times, and continue to innovate to capitalize on the emerging opportunities in these dynamic sectors.  

Sources: Pitchbook Data, Inc.

Education Technology Transactions by ASEAN-Based Investors

Education Technology Transactions by ASEAN-Based Investors

The education technology (edtech) sector has witnessed an influx of funds, securing approximately $8.5 billion through 400 transactions from ASEAN-based investors between 2020 and Q1 2023. The COVID-19 pandemic accelerated the demand for edtech solutions as remote learning spiked, sparking investor interest. Favorable market conditions, supportive government policies, and a focus on innovation have led ASEAN investors to actively contribute to edtech’s growth.  

This report provides an overview of the edtech investment landscape by ASEAN-based investors, analyzing key trends, notable deals, and regional preferences. 

Edtech has grown significantly across various subsectors, including augmented reality (AR) and virtual reality (VR), e-learning, artificial intelligence, gamified learning, and video-based learning programs. Technology has enhanced learning by increasing interactiveness, accessibility, and effectiveness for diverse learners in the digital age. 

Video learning enhances e-learning experiences through movies, graphics, and other visual elements. Advanced features like 3D or AI help students grasp concepts better, automate processes, and personalize learning experiences. Emerging technologies such as augmented reality, virtual reality, and gamified learning are transforming education by providing immersive experiences, increasing engagement, and making learning enjoyable. 

  • Since 2020, edtech companies have attracted $8.5 billion in investments from ASEAN-based investors through 400 transactions between 2020 and 2023 Q1. The average deal size in the sector throughout this period was $21 million. 
  • The first quarter of 2021 saw the largest capital deployment of approximately $2 billion in the sector across 23 deals. 
  • Investment figures fluctuated from Q2 2021 onwards, with periods of growth and decline. Notable fundraising activities by Unacademy, BYJU’S, and Kakao Entertainment played a major role in driving these significant investments.
  • The largest edtech investment by ASEAN-based investors was a $2 billion financing round in BYJU’S in March 2021. Notable participants in this round included venture capital firms like BlackRock and QIA.
  • BYJU’S, an Indian edtech company, provides online learning programs for students from kindergarten to grade 12. It has grown into one of the largest global edtech companies and expanded through acquisitions, including Aakash Educational Services. 
  • ASEAN venture capitalists accounted for 7% of the total capital deployed in edtech companies for 282 deals in the period. The average ticket size of $2 million may indicate the growth of new market entrants.
  • ASEAN private equity firms invested $7 billion into this sector (87% of the capital deployed) for 97 deals, suggesting an appetite for more established edtech companies among ASEAN PE firms.
  • Only 24 mergers and acquisitions in the sector indicate a focus on strategic acquisitions with higher average deal values (around $21 million).  This could suggest that larger edtech companies are acquiring complementary technologies and expertise and expanding their customer base.
  • Of all funding from ASEAN-based investors $4 billion was invested in India. This significant amount of $4 billion reflects the rapid expansion of the edtech ecosystem in recent years in India, coupled with the entry of multiple billion-dollar startups. 
  • Only $189 million (2%) of capital invested by ASEAN-based investors was allocated to companies in Indonesia, Vietnam, Malaysia, and Thailand combined. Despite the lower funding allocation, the 118 total deals still indicate an appetite for this sector, albeit highlighting a preference for smaller investments and early stage companies in these markets.
  • As for Singapore, $389 million was injected into this sector over 71 deals. This may suggest a rise in the number of new participants entering the market, as well as Singapore’s commitment to embracing educational innovation to maintain its status as a thriving and competitive nation in educational standards.
ASEAN investors actively support the education technology market, investing billions to drive innovation and digital transformation. The adoption of artificial intelligence (AI) and machine learning (ML) technologies for personalized eLearning, accelerated by the impact of COVID-19, has fueled market growth. Collaboration, innovation, and adaptability are vital for the sector’s success in meeting evolving learner and institutional needs. With advancing technology and growing demand for online education, the edtech market presents vast opportunities for investors and entrepreneurs.  

Sources: Pitchbook Data, Inc.

Media Technology and Data Storage Transactions by USA-Based Investors

Media Technology and Data Storage Transactions by USA-Based Investors

USA-based investors have deployed $18bn into the media technology sector, and $44bn into the data storage sector since 2020. The most significant capital market activity in both industries occurred within mergers and acquisitions, highlighting the appetite for market consolidation. Businesses within these industries should be mindful of market trends and opportunities.

This report provides a comprehensive analysis of investment activity in the media technology and cloud storage sectors by USA-based investors. The data set analyzed focuses on capital deployment, transaction types, geographical distribution, and investor preferences within the industry. By analyzing the data and trends from 2020 to 2023, this report reviews the dynamic landscape of media technology and cloud storage investments, offering insights into market dynamics and growth opportunities.

  • Since 2020, media technology companies have attracted $18bn in investments through 479 transactions with an average deal size of $38mn.
  • In Q4 2021, over $7bn was invested in media technology companies, the highest capital invested between 2020 and Q2 2023. This was driven by four large mergers and acquisitions in the sector, including Blackstone’s acquisition of Foundry ( for over $1bn.
  • In 2022, after the strong outlier of Q4 2021, there was a significant decrease in investments in media technology companies, in line with broader trends in technology capital markets.
  • The recent uptick in investments during Q2 2023 could indicate a renewed interest amongst investors in the sector, suggesting that investors see increased opportunities at lower valuations, and as a result, are now willing to re-engage with the sector.
  • USA-based media technology companies received 66% of all the capital allocated by USA-based investors globally. This indicates investors’ preference for domestic transactions within the sector.
  • Of the capital deployed in the sector, 20% was made to companies based in Canada. The largest transaction was the acquisition of Score Media Ventures by Penn National Gaming for $1.9bn in October 2021. The similar market conditions, business culture, and time zone resulted in simpler integration processes for USA acquisitions in Canada compared to other global regions.
  • The relatively lower percentages of 7% for Europe, 6% for East Asia, and 1% for other regions represent a smaller market share for media technology companies outside of North America. This suggests that these regions are yet to fully establish themselves as notable hubs for media technology companies, attracting a relatively smaller proportion of USA-based investments.
  • From 2020 to Q2 2023, 38% of media technology transactions were mergers and acquisitions, highlighting the industry’s significant consolidation activities.
  • A large portion of investments in media technology companies came from venture capital (VC) firms, accounting for 26% of funding. This could indicate the growing attractiveness of early-stage and high-growth companies.
  • Of the investments in the sector, 23% were conducted by private equity firms, highlighting the media technology sector’s maturity and abundance of growing companies.
  • Between 2020 and Q2 2023, data storage companies attracted a total investment of $44bn through 614 transactions, with an average deal size of around $70mn.
  • In Q1 2022, the sector experienced more than 60 transactions, with over $17bn deployed, with the largest transaction being the acquisition of CyrusOne by Global Infrastructure Partners and KKR for $15bn.
  • The capital invested in the sector gradually decreased in subsequent quarters, suggesting a temporary downturn or a possible shift in investor sentiment.
  • Of the announced deals by USA-based investors, 92% were deployed in data storage companies located within the USA during the period. This could indicate an emphasis on development in domestic data storage companies. This might be due to factors like data privacy and compliance, local infrastructure and connectivity, and the fact that the US economy is transforming digitally faster than the rest of the world, creating a need for more data storage technologies.
  • The chart shows a relatively smaller share of interest in the European market, with only 6% of investments in data storage companies. This could be due to various factors, such as market dynamics, geopolitical events, regulatory differences, or differences in perceived opportunities.
  • Only 2% of the announced deals were in regions other than the USA and Europe, highlighting a restricted presence and investment activities in other markets, suggesting potential untapped opportunities for future expansion and exploration in these  regions.
  • Of the transactions involving data storage companies, 61% were classified as mergers and acquisitions, highlighting a strategic approach by investors to combine companies, assets, and capabilities to strengthen market position and drive growth.
  • The data indicates limited participation of venture capital (VC) firms in transactions involving data storage companies, accounting for only 2%. This lower percentage can be attributed to the capital-intensive and heavy nature of the data storage industry, which requires significant investments in infrastructure, technology, and research.
  • The data storage sector attracts a higher proportion of investments from other investors, such as private equity (29%), who are better positioned to handle the industry’s CAPEX-intensive nature.
In conclusion, the above report reveals a robust ecosystem of media technology and data storage companies, driven by substantial investments from USA-based investors. The data showcased a notable emphasis on domestic investments, particularly in data storage companies within the USA, indicating a robust and flourishing sector. While the USA dominates the investment landscape, there are opportunities for collaboration and expansion in international markets, as indicated by the relatively smaller share of investments in regions such as Europe and East Asia.

Sources: Pitchbook Data, Inc.

How to Perform a Disciplined Sell-Side M&A Process to Maximize Results

How to Perform a Disciplined Sell-Side M&A Process to Maximize Results

The sell-side M&A process, facilitating the sale of a business, is long and complex. Bringing a company to market does not guarantee the company will achieve its M&A goals. The M&A process is challenging for three reasons:

1. It is difficult to build consensus among a large number of stakeholders.

2. Gathering relevant, transparent, and adequate data is complicated, particularly in private markets.

3. The M&A process contains many steps, and within each step, there are many opportunities for things to go wrong.

This report contains the step-by-step guide Jahani and Associates (J&A)—an NYC-based professional services and advisory firm—uses to maximize results for its clients. Each step in the sell-side M&A process is driven by activities, deliverables, and solutions.

STEP 1: Preparation to Solicitation

Preparation for solicitation requires the company and their investment banker to generate the artifacts buyers need to make an offer for the company. This information includes but is not limited to financial information, the growth history of the company, intangible asset information (e.g., customer relationships and proprietary technology), and the reasons the owners are selling the business.

Industry-standard deliverables, such as a confidential information memorandum (CIM) and audited financial statements, are used in this phase to market the business to potential buyers. This phase is vital because any delays while in market can impact the outcome of a transaction.

STEP 2: Solicitation to IOI

Reaching a sufficient number of solicitations to find an interested buyer is difficult and crucial, particularly in the lower-middle and middle markets. J&A recommends only sending detailed material during the preparation phase to potential buyers after they have signed an NDA. Common sources of buyer solicitations include direct connections from an investment banker’s network, direct solicitations of qualified buyers determined from research (e.g. PitchBook), and targeted emails to qualified lists of buyers. 

IOIs (Indications of Interest) contain valuation ranges and general expectations of earn-out, which should be negotiated as necessary to have a smooth transition from an IOI to an executable letter of intent (LOI). IOIs are non-binding.


A site visit usually occurs while transitioning an IOI to an LOI and is an opportunity for the buyer and seller to meet and conduct a deep dive into any outstanding items that need to be settled before executing an LOI. Since LOIs are legally binding, many buyers will require exclusivity after an executed LOI, which is also referred to as a “no-shop clause.” This means the seller will not be able to conduct sale-related conversations during the no-shop period and must ensure the upcoming due diligence will be satisfactory, in order to close the deal.

STEP 4: LOI to Purchase Agreement, Including Due Diligence

Due diligence is the process of affirming the information the buyer has used to make his offer and determining whether or not the company is in good standing with all relevant information in its possession. It is often the longest part of the sell-side M&A process, as it may take up to 120 days.

Once due diligence is complete, executing the purchase agreement, where ownership changes hands, is the final step in the sell-side M&A process. Agreements can be asset purchases or stock purchases. If due diligence went as expected, which is vastly important, this step should be relatively simple. Changes that may affect purchase agreement negotiations are material discoveries in due diligence, economic forces, material alterations in business operations, and management changes.

Problems and Solutions: Quickly Resolving Challenges Requires

Deep Thinking and Preparation

Jahani and Associates has collected common challenges that exist in each step of the sell-side M&A process and the best way to resolve them. In order to avoid disruptions or delays in the M&A process, it is important for M&A stakeholders to plan ahead and know where weaknesses may rise, and also imperative that the investment banking team has a plan to resolve these challenges before they even arise.

Preparation to Solicitation

Companies most often do not go from preparation to solicitation when seller management teams are not aligned or properly prepped for the sell-side M&A process. This can occur when multiple stakeholders are involved, particularly in companies boasting a significant capital raise. If a business undergoes a change that materially reduces the company’s desired valuation, management often decides to postpone the process.

Solicitation to IOI

As a solicitation to IOI is fundamentally a sales process, sellers, and their teams are most prepared when they view this as a sales exercise. This is often the most difficult step in the process for unprofitable companies in the lower-middle market.


Moving from an IOI to LOI is a matter of negotiation and mutual understanding between the buyer and seller. A site visit is often used between the IOI and LOI to develop a relationship between the buyers and sellers.

LOI to Purchase Agreement, Including Due Diligence

Due diligence is the process of confirming the buyer’s understanding of the business at the time they made their offer. Due diligence is time-consuming and material information that changes the valuation, and earn-out identified in the LOI may be discovered during due diligence. This will be negotiated as part of the purchase agreement, which may be made for either cash or stock, each of which has its own tax, legal, and strategic considerations.

The sell-side M&A process is challenging, but the seller’s success will be maximized when a disciplined process is followed.

The challenges, solutions, and KPIs in this paper are not exhaustive, but they provide an overview of the way to maximize success in sell-side M&As. It is important that all stakeholders understand the challenges they will face and how to alleviate them as quickly as possible. Establishing a consensus among stakeholders and then focusing on a problem-solution-KPI framework gives transparency to the client and allows the investment banker to increase the size of their team while preserving client service and information sharing. Experience in dealing with these issues is paramount to successfully delivering M&A results, and that experience must be coupled with actionable outcomes.

Any business owner seeking to sell their business must carefully consider all these factors and be aware of expected obstacles in order to significantly increase the likelihood that their company successfully completes a sell-side M&A transaction. The analysis contained herein is based on decades of experience and is included to support business owners across the world as they achieve a maximally successful exit.

In 2019, J&A surveyed hundreds of business owners about successful and failed M&A deals, why they failed, and how those failures could have been avoided. J&A then compared these stories with its own processes and tools to determine the best way to anticipate and avoid these failures in any M&A scenario. The resulting analysis is this document that outlines common reasons for failure and how to avoid them. This document is meant to serve as a resource to business owners and other service providers to give the best strategic advice and service for their business or clients.


1. Baird, Les, David Harding, Peter Horsley, and Shikha Dhar. “Using M&A to Ride the Tide of Disruption.” Bain & Company, January 23, 2019.

2. Buesser, Gary. “For the Investor: Internally Generated Intangible Assets.” Accessed November 22, 2019.

3. Corporate Finance Institute. “What is the No Shop Provision?” No-Shop Provision. Accessed November 22, 2019.

4. Deloitte. “Cultural issues in mergers and acquisitions.” Leading through transition: Perspectives on the people side of M&A. Last modified 2009.

USA Health Care Technology in 2022

USA Health Care Technology in 2022

In 2022, $110 billion was invested into health care technology. The health care sector in the USA experienced growth in capital market activities due to the impact of the COVID-19 pandemic, and approximately 45% of the transactions were in M&A deals. Health tech innovators played a vital role during the industry’s response to the pandemic and in the post pandemic recovery.

Investors have been consistently deploying capital into companies thinking ahead and planning for the future of the health care sector, positioning health care tech companies well for success.

USA Health Care Technology – Market Breakdown

  • Health care technology means any technology, including medical devices, IT systems, algorithms, artificial intelligence (AI), cloud, and blockchain, that is designed to support health care organizations and improve medical outcomes.
  • The benefits of technology in health care include increasing speed, accuracy, and accessibility in improving patient experience and care and real-time information exchange.
  • Health care technology is used in various forms, including, but not limited to, disease diagnosis and treatment, medical imaging, health care operations, and clinical research.

USA Health Care Technology in 2022 – Capital Market Analysis

  • In 2022 Q1, around $31 billion was invested into health care technology companies in the USA, accounting for 28% of total investments.
  • This figure dropped by 23% to $24 billion in Q2. This may be attributed to the invasion of Ukraine and the global geopolitical tension.
  • The highest capital investment per deal was seen in Q4, when the market started to pick up again, with an average of $33 million per deal.
  • The total amount invested in USA-based health care technology companies by Asian and Middle Eastern investors in 2022 was$10 billion over 137 transactions.
  • In 2022 Q4, $4 billion was invested, accounting for 40% of total investments in 33 transactions, averaging $121 million in each transaction. This is linked to the relaxation of COVID-19 regulations, which helped boost optimism.
  • The increase in capital investments by Asian investors was led by China as they began to relax COVID-19 restrictions.
  • The USA contributed the highest share (57%) of capital raised by region.
  • Europe was significantly impacted by the Russia-Ukraine war, which caused high inflation rates throughout the year. However, in Q4 the Eurozone recovered and outperformed other regions. Europe accounted for 19% market share.
  • East Asia only accounted for 17% of the total capital raised in 2022 due to ongoing COVID-19 restrictions.
  • China accounted for 52% of investments made by Asian and Middle Eastern investors into USA-based health care technology companies in 2022, due to the COVID-19 pandemic’s impact on the public’s overall mental and physical wellbeing.
  • China is followed by Hong Kong, which accounted for 17% of total investments in 2022 after achieving strong growth in Q4.
  • South Korea, Singapore, UAE, and India accounted for a combined 24%.

USA Health Care Technology in 2022 – Deal Type Analysis

  • In 2022, 45% of the transactions in health care technology were mergers and acquisitions. This could be due to markets and valuation uncertainty, making buy-side mandates more attractive.
  • There were notable investments made by venture capital (VC) and private equity (PE) firms despite market conditions, with around $13 billion invested by VCs and $24 billion by PEs.
  • Noticeably, only 4% of the capital deployed was in IPOs, confirming the low valuations with a decreased appetite for companies to go public.
  • In 2022, 60% of the transactions in health care technology made by Asian and Middle Eastern investors were mergers and acquisitions, which was lower than in previous years due to high inflation rates in the USA.
  • There were notable investments made by VCs and PEs despite market conditions that accounted for 9% and 28%, respectively.
  • Noticeably, only 2% of the capital deployed was in PIPE deals.
In 2022, health care technology companies witnessed growth opportunities, evidenced by the amount of capital deployed. Economic uncertainty and global geopolitical factors impacted deal types and investments. Middle Eastern and Asian investors played a vital role in the transactions, especially after the pandemic created an economic, social, and health impact, all of which highlight the importance of further developing the health tech sector.

Sources: Pitchbook Data, Inc.

Generative AI

Generative AI

Companies within the Generative Artificial Intelligence (AI) sector have raised over $15 billion since 2022. Many companies, including OpenAI, have attracted the attention of Silicon Valley and the financial media, bringing the sector to the forefront of venture conversations.

Venture capital transactions account for 45% of the capital deployed into announced Generative AI capital market transactions and 77% of all transactions conducted in the sector. The venture capital transactions showcase the momentum and growth potential of the industry.

Introduction to Artificial Intelligence Research and Analytics

AI language models utilize AI in complex linguistic structures that allow human-like interactions. The technology is set to disrupt traditional search engines by providing detailed answers to queries rather than just providing links.

The latest generation of AI language models has a wide variety of applications, including, by not limited to, complex coding, drafting legal contracts, and even creating music and art.

  • Since 2020, $15 billion has been invested in Generative AI companies across 1,164 transactions. The average deal size of approximately $13 million indicates the sector’s early-stage nature and growth potential.
  • Anthropic, an AI safety and research company, conducted the largest transaction in the period, closing closed $580 million Series B round in April 2022 at a pre-money valuation of $3.42 billion. A consortium of angel investors and Alphabet conducted the deal.
  • OpenAI conducted a private secondary transaction with Fenrir Asset Management of an undisclosed amount on January 13, 2023. The company’s most significant capital raised to date of $1 billion was completed in July 2019, with Microsoft being the sole investor.
  • Approximately $7 billion has been invested into early-stage AI research and analytics companies through venture capital transactions. The capital was deployed over 871 deals with a median size of $8 million.
  • Venture capital transactions, including grants, seed and angel funding, and accelerator programs, contributed 45% of the capital deployed into announced Generative AI capital market deals. These transactions accounted for 77% of the deal count conducted in the sector over the same period.
  • POs and PIPEs accounted for a smaller portion of market activity due to the early stage of the technology and companies.
  • USA-based Generative AI companies raised $9.7 billion through 608 transactions, with a median deal size of approximately $16 million between 2020 and 2022. USA-based companies raised 64% of the capital deployed in the sector, accounting for 52% of the deal count over the same period.
  • Companies from Israel, China, and the United Kingdom have also conducted significant capital market transactions raising $1.43 billion, $1.22 billion, and $1.07 billion, respectively.
Generative AI is set to disrupt many industries, including search engines, client services, and IT services. Early-stage companies are well-funded in the sector, particularly in the USA, by some of the largest technology companies, such as Google and Microsoft. Investors and founders need to be aware of the opportunities and threats that AI research and analytics technologies possess.

Sources: Pitchbook Data, Inc.

The USA Technology Sector in 2022: Market Overview

The USA Technology Sector in 2022: Market Overview

Investors in emerging markets are performing an increasingly important function in funding early-staged USA-based technology companies. Capital invested by Middle Eastern and Southeast Asian investors in the sector increased by 85% between 2021 and 2022, with venture capital transactions responsible for 57% of all investments in the industry in 2022.

Economic growth has continued in emerging markets such as the Middle East and Southeast Asia, prompting early-stage technology companies to be mindful of international fundraising opportunities.

The Decline of the USA Technology Market in 2022

Publicly listed technology stock in the USA fell by 30% in 2022 ( Economic uncertainty, inflation, and increased interest rates to reduce excess liquidity within the market were driving factors in the decline. The decrease in investor appetite for technology stocks has led to a sharp reduction in valuations, and decreased access to funding from USA markets.

  • The Dow Jones U.S. Technology Index was down by over 35% in 2022, in contrast to 2021, which was a landmark year for the index, setting a record high of 4,866.69 on December 27, 2021 (
  • Other technology-focused indexes illustrated similar diminishing returns, with the Nasdaq Composite falling 33% in 2022 (, indicating a reduced appetite for technology stocks.
  • Valuation negotiations between founders and investors have altered drastically. Valuation based on projected revenue multiples is no longer the norm, and early-stage investors increasingly utilize traditional price-to-earnings ratios (

Growth of Emerging Markets in 2022

  • Increasing interest rates and escalating fuel prices caused slow growth in developed markets in 2022. The USA and UK experienced GDP (Y-o-Y Q4) growth rates of less less than 1% compared to 2021 Q4, with similarly slow growth occurring across the European Union (
  • Conversely, the increase in fuel prices, caused in part by the war in Ukraine, aided the GDP growth of Middle Eastern states such as Saudi Arabia (9% Y-o-Y Q4 GDP), the UAE (4% Y-o-Y Q4 GDP), and Qatar (4% Y-o-Y Q4 GDP). Post covid reopening economies, large infrastructure projects, and the tourism sectors’ continued development have also contributed to the region’s growth.
  • Despite challenging global economic conditions, Southeast Asia remains one of the world’s fastest-growing emerging regions. Malaysia, Indonesia, and Singapore all grew GDP by over 4% in Y-o-Y Q4 2022, driven by reopening travel routes and increased trade and commerce.
  • $400 billion was invested by Middle Eastern and Southeast Asian investors into USA-based technology between 2012 and 2022, with 60% occurring between 2020 and 2022 and $155 billion deployed in 2022 alone.
  • The deal count conducted by Middle Eastern and Southeast Asian investors into USA-based technology companies increased from under 150 transactions in 2012 to over 1,000 in 2021.
  • The sector’s deal count decreased by 24% between 2021 and 2022, yet capital invested in the industry increased by 85% during the same period, showing a continued appetite to invest in USA-based technology companies and a leaning towards more significant deals.
  • Venture capital transactions accounted for 57% of the deal count by Middle Eastern and Southeast Asian investors into USA-based technology companies in 2022.
  • Despite challenging economic conditions, the focus on early-stage companies further highlights the appetite to invest in USA-based technology companies, showing the strength of the US technology industry and the trust that international investors have in the US financial markets.
Early-stage technology companies from the USA should consider opportunities to raise funds internationally. Uncertain economic conditions in developed economies have reduced capital market activity, particularly for early-stage transactions. Middle Eastern and Southeast Asian investors have an increased appetite for USA-based tech companies, evidenced by the growing amount of capital deployed.

Sources: Pitchbook Data, Inc.

How Will the US Economic Downturn Affect M&A Activity?

How Will the US Economic Downturn Affect M&A Activity?

Real GDP in the USA decreased by 0.9% in Q2 of 2022 according to the Bureau of Economic Analysis. This follows a 1.6% decrease in 2022 Q1, resulting in the USA economy falling into recession. The USA is not alone, with developed nations like Germany, Japan, and an array of others experiencing similar contractions according to The global economy has been impacted by numerous exogenous shocks over the past 30 months, including lockdowns, supply chain crises, stimulus packages, and oil price hikes among others.

The economic conditions will undoubtedly affect capital markets, but the outcome remains uncertain. The reduction in liquidity could shrink capital market activity. Alternatively, a slowing business cycle could result in a buyer’s market, allowing for aggressive consolidation and roll-up strategies. This article will investigate the difference in capital market activity between 2021 H1 and 2022 H2 to determine the effects of the downturn in Western markets.

Why the USA Remains Critical to Capital Markets

  • The USA has contributed 64% of capital deployed in M&A deals since 2020, with a total spend of $4.33 trillion. Businesses in the UK, France, and Japan conducted significant M&A deals within the period with 10%, 5%, and 3% of capital deployed, respectively.
  • Over the same period, 22,178 announced deals have been conducted by companies from the USA.
  • The economic downturn in the USA and major Western economies will impact capital markets in 2022 and beyond.
  • Capital deployed in M&A deals globally increased by 67% from 2021 H1 ($1.15 trillion) to 2022 H2 ($1.91 trillion). Deal count within the period has remained stagnant with a 3%decrease between 2021 H1 (12,692 M&A transactions) and 2022 H1 (12,302 M&A transactions).
  • Median deal size increased from $19 million and $24 million in 2021 Q1 and Q2, respectively, to $31 million and $43 million in 2022 Q1 and Q2, respectively.
  • The highlights an increased appetite for acquisition despite economic downturns, as role-up strategics become increasingly aggressive leading to larger deal sizes. Challenging business conditions would drive the supply side demand while lower valuation would lead to an increase in demand for acquisitions.
  • Capital deployed in cross-border M&A deals by USA-based companies increased by 59% from 2021 H1 ($69 billion) to 2022 H2 ($169 billion). Deal count grew consistently by a 13% increase between 2021 H1 (706 M&A transactions) and 2022 H1 (813 M&A transactions).
  • Median deal size increased from $53 million and $46 million in 2021 Q1 and Q2, respectively, to $70 million and $150 million in 2022 Q1 and Q2, respectively.
  • The data suggest significant growth in cross-border M&A activity by USA-based companies. The degree of competition in domestic markets as well as more affordable valuations in international markets will continue to drive future cross-border transactions.
M&A in the first half of 2022 has grown significantly, with a 67% increase on 2021 capital deployment in the sector over the same time period. The true effects of a recession remain unknown. The data suggest that firms have capitalized on lower valuation multiples and challenging economic conditions to execute inorganic growth strategies. Retained profits achieved in 2021 are likely to be used to execute acquisitions. Liquidity within the market will continue to shrink as global monetary policies tighten, so it is uncertain whether the surge in M&A activity will continue. Current economic conditions present the ideal buyer’s M&A market.

Sources:,, Pitchbook Data.

Middle Eastern Investors and USA Startups

Middle Eastern Investors and USA Startups

Fintech as a sector increased its cross-border capital market activity in 2021. The first 10 months of 2021 saw a 300% increase in capital deployed by Middle Eastern investors into USA startups at 2020 levels. (In this report, startups are classified as private organizations that raise capital through venture capital or growth-stage private equity rounds.) Middle Eastern investors have an appetite to invest in USA-based early-stage fintech companies. Stripe and Square may be grabbing the headlines, but smaller companies have been successful in raising early-stage funding internationally.

Capital Market Activity

Middle Eastern investors have deployed approximately $6.5 billion into early-stage fintech companies based in the USA since 2020. Within the segment, 164 announced deals have been conducted. Middle Eastern investors’ desire to diversify their portfolios away from oil and natural gases and into high-growth private companies drives the increase in market activity.

  • Deals between USA-based fintech companies and Middle Eastern investors increased significantly between 2020 and 2021. In 2020, a total of $1.45 billion was deployed across 67 deals. In the first 10 months of 2021, $5.1 billion has been deployed across 97 deals.
  • Between Q2 of 2020 and Q2 of 2021, capital deployment increased 10-fold while deal count more than doubled. In 2020, Q2 was the least active quarter of the year due to the economic effects of the global lockdowns. Deal count and capital deployment has increased steadily over the remainder of 2020 and 2021.
  • The largest deal in the sector was SpotOn’s $300 million Series E round. Mubadala Investment Company participated in the round, alongside Andreessen Horowitz and a consortium of other investors. The Series E saw SpotOn’s valuation increase from $1.875 billion to $3.15 billion, and the funds will be allocated towards acquisition financing.

Active Type of Transactions and Company Sizes


Active Investors and Their Latest Deals

Israeli venture capital funds lead the region with respect to deal count in the sector. Connections between the USA and Israeli capital markets remain strong with significant activity across software and technology sectors. Investors from the United Arab Emirates and other Gulf states are also increasing investments in USA-based fintech companies.

  • AltaIR Capital, a Tel Aviv–based venture capital firm with $600 million in assets under management, has conducted 14 deals with USA-based fintech companies since 2020.
  • Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund, invested in eight USA-based fintech startups. The group maintains a median check size of $200 million across sectors.
  • VentureSouq is the only investor on the most active list whose most recent deal in the sector was a seed-stage investment. The Dubai-based venture capital fund has made 141 investments since its inception in 2013 and has a median check size of $4 million.
  • Later-stage venture capital deals dominated capital deployed by Middle Eastern investors into USA-based fintech companies. Later-stage venture capital accounted for 69% of capital deployment and 34% of the deal count within the sector.
  • Growth and early-stage venture capital deals saw the largest percentage of deals with 36%, while accounting for 20% of capital deployed.
  • Incubators, pre-seed, seed, and angle rounds were not a significant contributor in the sector. This highlights the need for a proven business model, established products and services, and small yet stable income streams before raising capital from international sources.
Overall, the fintech sector is progressively increasing its capital market activity. Despite the pandemic slowing down other businesses’ activities, fintech deals from the USA received over $5 billion in capital in the first three quarters of 2021 from the Middle East alone. As the need for strong technology increases in the Middle East, J&A expects deal size and deal count to increase over the upcoming years. As the early-stage companies develop and establish new technology trends, funding for acquisitions will increase for the entities with a longer presence in the international markets.

USA Investors and Middle Eastern Startups

USA Investors and Middle Eastern Startups

Middle Eastern fintech companies have experienced a boom in capital market activity since the start of 2021 and the reopening of the global economy. The fintech industry is rapidly developing and disrupting traditional banking and financial institutions. Fintech startups in the United Arab Emirates, Egypt, and Saudi Arabia have conducted significant capital market activity since the start of 2020. Notably, groups in the segment have attracted investments from USA-based venture capital sources.

This report explores the investments made by USA investors into Middle Eastern fintech startups since 2020. Only announced deals are analyzed. This report will outline the type, volume, and industry of deals conducted by USA investors into Middle Eastern companies.

  • USA investor activity in the Middle East slowed down in 2020, as it did for most other cross-border investments. After the normalization of the global capital markets, fintech startups in the Middle East capitalized on the USA investor appetite. Transactions grew steadily in 2021, leading to over 20 investments in four quarters, from Q3 of 2020 to Q3 of 2021.
  • In Q4 of 2021, the average capital invested per deal more than doubled. Due to this, the overall capital deployed increased by 1,750% in 2021 compared to 2020.

Cross-Border Fintech Venture Capital Investments: USA Investors and Middle Eastern Companies

  • Significant deal count (37%) and capital deployment (39%) by USA-based investors into Middle Eastern fintech startups occurred within seed-stage investments. This shows the development of new companies designed to serve an underserved market and the strong potential for growth in the space.
  • Incubator funding made up 39% of the total sector deal count but less than 1% of capital raised. This suggests that most deals in the incubation phase were conducted without capital being injected into the business.
  • Early-stage venture capital accounted for 22% of deal count and 69% of capital deployment. The growth and funding of Middle Eastern fintech startups will lead to a boom in the sector as traditional banking and financial institutions are disrupted.

Deal Spotlight: Tarabut Gateway

The Company

Tarabut Gateway is a financial technology and software development company that has created a platform to regulate the banking sector. The platform is designed to connect a regional network of banks and other fintech companies through a universal applications programming interface (API). Tarabut’s platform utilizes the API to assist in the transfer of data and to create a greater level of integration within the finance sector in the region.

Recent Fundraising

  • Tarabut Gateway completed a pre-Series A round of $12 million on November 2, 2021, at an undisclosed valuation.
  • Tiger Global Management led the round with Dubai International Finance Center and other undisclosed investors participating.
  • Tarabut Gateway had previously raised $13 million through seed funding in February 2021, which was also led by Tiger Global Management.
The fintech sector is rapidly developing in the Middle East, and early-stage companies will drive transformation within the banking and financial sectors. International investors should be mindful of the growth potential of the sector and the opportunities that well-funded startups can capitalize on. J&A forecasts the continued expansion of capital market activity between USA-based venture capital funds and Middle Eastern fintech startups.

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