Singapore fintech sector bags S$462m in funding in H1 2020

INVESTMENT in Singapore-based financial technology (fintech) firms spiked year on year in the first six months, on the back of a surge in deals in April and May 2020.

Equity funding hit S$462 million in the period to June 15, up 19 per cent against the first half of 2019, going by industry data released 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 the was next biggest cluster for investors, attracting S$67 million in equity funding; technology providers pulled in some S$65 million.

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

Pauline Wray, managing director of BCG FinTech Control Tower, said the ecosystem 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, adding 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 latest funding data.

MAS chief fintech officer Sopnendu Mohanty said in a statement: "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."