The paytech M&A and funding story of 2025

Volker Schloenvoigt and Rohan Shaju of Edgar, Dunn & Company (EDC) highlight the top trends in paytech funding and M&A activity in 2025 and the key learnings for the year ahead.

The paytech sector entered a new phase in 2025, characterised by plenty of activity but changing priorities. Across M&A and funding, 610 transactions were completed with over USD 67 billion in disclosed value, slightly below 2024’s peak but well above 2023 levels. But we do need to bear in mind that not all deals disclose financial terms at the time of being made public, so the total deal value will actually be higher in all years.

While overall deal volumes have stabilised (472 in 2023, 628 in 2024, and 610 in 2025), the composition of activity reveals a clear transition: M&A has steadily increased year-on-year, becoming a critical part of companies’ growth strategies, while funding rounds peaked in 2024 before moderating in 2025. Investors are showing a sharper focus on profitability and business fundamentals, signalling a move away from growth-at-all-costs strategies. Capital remains available, but the bar for deployment has risen substantially.

This analysis draws on EDC’s proprietary paytech M&A and funding database, which has tracked over 1,700 global transactions from 2023 through 2025, covering acquisitions, minority investments, mergers, and funding rounds across the paytech ecosystem. The data highlights several emerging trends: funding is concentrating in fewer but larger rounds, M&A is increasingly central to growth, and investors are applying more scrutiny to underlying business fundamentals. The following sections explore these dynamics in detail, starting with M&A activity and then turning to funding.

M&A: the structural shift to consolidation

On the M&A side, the EDC database distinguishes between different transaction types, namely acquisitions, minority stakes, mergers, and de-listings, with acquisitions of controlling stakes remaining the dominant transaction type. Across the three-year period, M&A deals per annum continuously rose from 125 in 2023 to 198 in 2025, underlining a clear structural shift from funding-led growth to consolidation-led growth. Within this M&A segment, acquisitions accounted for the vast majority of transactions and almost all of the year-on-year growth, rising from 107 deals in 2023 to 188 in 2025.

In value terms, while the majority of deals remain undisclosed, paytech M&A climbed from USD 24 billion in 2023 to USD 68 billion in 2024, before coming down to USD 45 billion in 2025. The 2024 spike was almost entirely driven by a handful of very large transactions (such as Capital One’s USD 35 billion acquisition of Discover, Fiserv’s acquisition of Shift4, Advent acquiring Nuvei, and so on). However, at the time of writing, the Global Payments acquisition of Worldpay (for USD 24 billion) had not officially closed yet. Assuming the go-ahead, the total acquisition value in 2025 would have been USD 69 billion – and therefore almost identical to 2025.

The 2025 M&A landscape was characterised by large, capability-driven platform deals aimed at strengthening companies’ technical edge. Notable examples include Mollie's EUR 1.1 billion acquisition of GoCardless to expand A2A capabilities, Xero's USD 2.5 billion acquisition of Melio, and TPG/Corpay's USD 2.2 billion acquisition of AvidXchange. Looking at buyer types, most of the action comes from strategic buyers, not financial investors.

Regionally, the US and UK remain the brightest hotspots, accounting for more than 50% of global activity, followed by a ‘good band’ of activity across Western Europe – notably in the Netherlands, France, and Germany. Beyond these markets, the most significant activity emerged in Australia and South Africa, where deals were more selective and infrastructure-focused. Recent examples from early 2025 include Nedbank's USD 94 million acquisition of South African POS provider iKhokha and Banking Circle's acquisition of Australian Settlements Ltd (ASL). Overall, this shift confirms that the sector has moved into a mature phase where market leaders buy specialised tech to stay on top in the long run.

The funding landscape: fewer bets, higher stakes

On the funding side, which covers everything from (Pre-)Seed through late-stage Series funding rounds, the 2025 narrative is one of resilient concentration. While M&A activity was characterised by high-volume consolidation, funding focused on scaling established winners. In 2025, we tracked 412 disclosed rounds raising a total of USD 22 billion, a decrease in volume from the 471 rounds in 2024, but a notable increase in total capital deployed.

While the ‘number of checks’ has fluctuated (as deal counts moved from 347 → 471 → 412), the liquidity provided to paytechs is now at its highest level for three years at USD 22 billion. The market has moved from the ‘diversified risk’ approach of 2024, where investors wrote more, smaller checks, to a 2025 environment where a similar pool of capital is concentrated into fewer, better-understood companies.

This shift is underscored by average deal sizes, which climbed to USD 55 million in 2025 (up from USD 48 million in 2024). These data point to a pickier market, not a shrinking one; investors are still deploying capital, but the ‘bar’ for entry has moved higher. In fact, based on our experience from helping clients raise funds, we far more frequently heard the narrative ‘Yes, we see this is a great product, but come back to us in 6-12 months’ time when your revenues (or profits) have increased by X’.

Geographically, funding activity mirrors the M&A picture. The US and UK remain the largest markets, accounting for the majority of funding rounds in 2025, particularly at the early stage.

Early-stage funding (Pre-Seed, Seed, and Series A) remains the engine room of the sector, accounting for nearly half of all deal counts in 2025. Average deal sizes at this stage remain modest, around USD 13 million in 2025, compared with late-stage rounds, where average sizes reached USD 268 million at Series E and USD 170 million at Series F, as expected.

That said, early-stage averages mask some notable outliers. Examples include EQT Ventures and Sequoia’s USD 11 million Pre-Seed investment in payments and billing platform Paid, Accel-led USD 23 million Seed funding for cross-border payments provider OpenFX, and PeakSpan Capital’s USD 225 million Series A investment in payroll and workforce payments platform Tapcheck.

Overall, early-stage cheques remain plentiful, especially for compelling AI-driven and payments infrastructure plays, while late-stage equity rounds are rarer and more selective. On the investor side, Accel Private Equity was one of the most active financial investors in 2025 – just like in previous years – with 13 investments, followed by Insight Partners and Sequoia Capital. While these investors were active across multiple stages and segments, their capital has been primarily concentrated in payment technology and B2B, reflecting continued conviction in infrastructure-led growth. Flourish Ventures also features among the most active investors in 2025, with five investments, largely focused on emerging markets, including MoneyHash (Egypt) and Akua (Colombia).

Segment-wise breakdown: in what segments are the deals happening?

Fintech remains the most active segment, with 219 transactions in 2025, accounting for 36% of all paytech deals. Activity is concentrated around embedded finance, crypto/blockchain, lending, and payment automation tools, reflecting continued demand for products that sit closer to core business workflows.

Payment technology is the second-largest segment, with a 17% share and growth of over 40% versus 2024. Businesses in this segment are often focusing on fraud prevention, identity/KYC, risk analytics, and real-time payment infrastructure – effectively the intelligence layer that enables increasingly complex payment flows to operate securely and compliantly. Digital payments round off the top three, with 95 deals (16% of activity, +20% YoY), driven mainly by PSPs, payment orchestration platforms, A2A payment solutions, and digital wallets.

Zooming out, the 2025 segment mix looks very similar to the combined 2023–2025 picture, suggesting that capital allocation has remained broadly consistent over multiple years. The remaining segments account for a smaller, more opportunistic share of deal flow.

What other trends stood out in 2025?

AI core to paytech strategy

AI has rapidly shifted from a differentiator to a core capability across the paytech stack in 2025. Earlier this year, EDC reported that AI-related transactions accounted for about 9% of deals year-to-date through August 2025, up from 5% in the same period in 2024. By year-end, this figure rose to roughly 10%, showing continued momentum. Deals include AI-native firms, companies enhancing AI capabilities, or those acquiring core AI technologies. Major funding rounds like Xelix, Sardine, and Catena Labs signal a move towards agentic AI beyond incremental process improvements. Activity was most concentrated in fraud prevention and risk management, B2B payments and financial operations automation, and payment technology infrastructure – areas where AI delivers the clearest operational leverage.

Debt facilities fuel the embedded finance infrastructure

The use of multi-layered capital structures was a recurring theme in 2025, as paytech companies increasingly paired equity raises with obtaining significant (or incremental) debt facilities to fuel capital-intensive business models. Mondu's EUR 116 million raise is a textbook case – they secured a EUR 100 million debt facility from JP Morgan to fund the balance-sheet-heavy B2B BNPL side of the business, while keeping their equity raise small. Similarly, strategic banks like HSBC, Barclays, and JP Morgan have become central to these structures, providing the ‘heavy lifting’ capital required in lending-heavy segments like BaaS and SME embedded finance.

Stablecoin rails go mainstream

The shift toward stablecoin infrastructure has emerged as one of the most practical trends of 2025, with these deals now representing about 7% of all activity. The focus has moved from speculation to real use cases, including B2B payments and instant cross-border settlement. Visa highlighted this trend early in the year by backing BVNK, while Mastercard is reportedly in talks to acquire Zero Hash for up to USD 2 billion. Other notable moves include Ripple’s USD 200 million acquisition of stablecoin platform Rail, Rain raising over USD 80 million for stablecoin issuance, and RedotPay closing a USD 107 million Series B. Stablecoins have transitioned from the fringe to a functional, high-speed ‘third rail’ for moving money globally, complementing legacy banking infrastructure.

Outlook for 2026

Heading into 2026, the sector still has ample dry powder, but not for everyone. While AI-driven capabilities, particularly those enabling agentic commerce, are expected to play a central role in investment and M&A, other areas such as stablecoins, advanced payment rails, and operational efficiency will continue to attract attention. The companies best positioned for success will be those that combine real AI-led improvements with strong fundamentals and scalable business models, turning innovation into measurable results.

About the authors

Volker Schloenvoigt is a Director in EDC’s London office and is responsible for the Merchant Acquiring/Payment Acceptance practice of EDC. Volker is working as an advisor in the payments industry for over 25 years, mainly in Europe and the Middle East. He has advised many industry players on strategy development, operational models, and benchmarking, as well as financial analysis. Volker has also worked on many commercial due diligence engagements for strategic and financial investors and has supported sellers in preparing documentation needed for IPOs or investor presentations. 

 

Rohan Shaju is a Consultant in the Paris office. Before joining EDC, Rohan worked for three years in India and France across technology strategy and transformation projects. Since joining EDC in 2023, he has gained valuable payment strategy expertise working with global card networks, issuers, fintechs, and travel merchants. Rohan holds a Master's in Management from ESSEC Business School in Paris, alongside an Electronics Engineering degree from India. Outside the realm of consultancy, Rohan follows cricket, football, and Formula 1. Additionally, he finds solace in activities like cooking, yoga, and skateboarding.

 

About Edgar, Dunn & Company

Edgar, Dunn & Company (EDC) is an independent global payments consultancy. The company is widely regarded as a trusted adviser, providing a full range of strategy consulting services, expertise, and market insights. EDC’s expertise includes M&A due diligence, legal and regulatory support across the payment ecosystem, fintech, mobile payments, digitalisation of retail and corporate payments, and financial services.