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Fintech investments in Singapore nearly quadrupled to US$453m in H1 2019: report

FINTECH investments in Singapore nearly quadrupled to US$453 million in the first half this year, up from US$118 million in the year-ago period - placing the country as the third largest fintech market by funds in Asia-Pacific, just behind China and India. This is according to the latest research by Accenture, which analysed data from CB Insights, a global venture-finance data and analytics firm.

In particular, the number of deals closed in Singapore rose by 55 per cent to 48, up from 31 in the first half of 2018.

About 28 per cent of the total funds raised in the period went to insurtechs, while fintech companies in payments took 27 per cent, and those in lending took 25 per cent, the data showed.

Five of the top 10 deals ever in Singapore took place in the first six months of the year. Examples include the US$100 million raised by cloud company Deskera in May; the US$80 million raised by financial products marketplace GoBear also in May; and a US$45 million equity funding round closed by cashback platform Shopback back in April, which was co-led by Rakuten and EV Growth.

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Divyesh Vithlani, a managing director at Accenture and Asean Financial Services practice lead, said: "The increase both in deal value and the number of deals is a good indicator of what's to come, and bodes well for the future development of cutting-edge financial technology in Singapore.

"There's a lot brewing in the Singapore fintech ecosystem, and this steady flow of funds shows investors' confidence in the industry’s future growth potential. The forthcoming virtual banking licenses will help create more opportunities for fintech start-ups and traditional banks to partner and cooperate, and should add another wave of investments in the sector."

Globally, investment in fintech ventures fell sharply in the first half of 2019, as fundraising and deal activity in China that had soared a year earlier ground to a halt, partially offsetting strong gains in the US, UK and several other European countries, Accenture noted.

For the six months ended June 30, the total value of fintech deals globally came in at US$22 billion, down 29 per cent from US$31.2 billion recorded last year. The drop was due mostly to the lack of a mega deal like Ant Financial's record US$14 billion fundraising in May 2018. Discounting this transaction, global fintech investments would have climbed 28 per cent in the first half of 2019 over the same period last year, Accenture explained. 

Specifically, the value of deals in the US jumped 60 per cent to US$12.7 billion, though the number of transactions was virtually unchanged from the same period last year, signalling a trend of larger deals in the world's biggest and most active fintech market, the report highlighted. 

Meanwhile, fintech investments in the UK nearly doubled to about US$2.6 billion, with the number of deals rising 25 per cent to 263, as challenger banks and payments companies continued to draw investors' interest. Money-transfer start-up TransferWise for instance, closed a US$292 million deal in May this year. 

Closer to home in Hong Kong, fundraising posted a near seven-fold increase in the first six months of 2019, with start-ups in the city raking in US$152 million, compared with just US$23 million last year, led by the US$100 million credit line that asset management firm FinEX Asia secured in June. The number of deals in Hong Kong also doubled to 12 from six a year ago.