H1 investment in Singapore-based fintech firms up 19%

Singapore

INVESTMENT in Singapore-based financial technology (fintech) firms spiked year on year in the first six months, on the back of a surge from deals in April and May this year.

Equity funding hit S$462 million in the period to June 15, up 19 per cent on the first half of 2019, according to industry data out on Friday.

Banking services for small and medium-sized enterprises (SMEs) made up the biggest chunk of fund-raising at S$223 million, fuelled by the payments and lending product verticals. Retail banking was the next biggest cluster, attracting S$67 million in equity funding; technology providers pulled in S$65 million.

The data showed that more investments were made in mid-stage fintech companies - Series C or later - than in seed and early-stage funding.

Pauline Wray, managing director of BCG FinTech Control Tower, said that this suggested the ecosystem here is maturing some five years after the Monetary Authority of Singapore (MAS) unveiled a focus on fintech.

"Fintechs across the world have injected a new lease of life to financial services by supporting the financial industry as they provide value-added services and products to both new and existing customers," she said. Ms Wray added that policies from the MAS are "now coming to fruition".

BCG FinTech Control Tower, a research collaboration between Boston Consulting Group and Expand Research, worked with the MAS to compile and analyse the funding data.

MAS chief fintech officer Sopnendu Mohanty said: "As we come out of the coronavirus pandemic, fintech has the great opportunity to make a meaningful impact in 2020 and beyond by accelerating digitalisation of financial services.

"In spite of the challenging environment, investors' confidence in fintechs demonstrates a deep understanding and appreciation of the long-term value fintech firms will create."