Singapore fintech investments more than double to US$365m in 2018 amid global surge: Accenture

FINTECH investments in Singapore more than doubled to hit US$365 million in 2018, up from US$180 million in the previous year, placing it among the top five fintech markets by funds raised in the Asia Pacific last year, according to an analysis by Accenture. Within the region, Singapore lags behind Australia, China, India and Japan.

This is according to a report by the consulting firm, which analysed data from CB Insights, a global venture-finance data and analytics firm. The investment data ranged from 2010 through 2018, and included equity and non-equity financing.

The number of deals in Singapore rose 16 per cent to 71 in 2018 from 61 in 2017, according to Accenture, which defined fintech companies as those that offer technologies for banking and corporate finance, capital markets, financial data analytics, insurance, payments and personal financial management.

Eight of the top 10 largest deals in Singapore also took place last year. These include the US$60 million raised by cloud company Deskera in November, US$52 million raised by insurtech Singapore Life in December, and US$32 million raised by cryptocurrency and blockchain startup Terra.

About 28 per cent of the total funds raised in Singapore last year went to fintech companies in lending, while those in payments took 26 per cent, and insurtechs took 20 per cent.

Divyesh Vithlani, Accenture's managing director of financial services in Asean said: "It's great to see the fintech market in Singapore reaching this level of activity and diversification, which just goes to show how much it's matured the past years.

"The size of the market and the value of deals still has a lot to catch up to regional giants such as China and India, but Singapore is already the third busiest fintech market in the region, and this level of activity bodes well for the future expansion of new technologies in many different areas of finance."

Globally, investment in fintech ventures more than doubled to US$55.3 billion in 2018, led by a surge in funding in China, and strong gains in several other markets as investors placed larger bets in more mature startups, Accenture said.

This growth was mainly due to the value of deals in China multiplying - by nine times - to US$25.5 billion in 2018, which was nearly as much as the US$26.7 billion from all fintech investments globally in 2017.

China accounted for 46 per cent of all fintech investments in 2018, thanks largely to the US$14 billion funding raised by Ant Financial, which operates mobile payments service Alipay, and is an affiliate of Alibaba Group Holding.

The number of fintech deals rose 19 per cent to 3,251 globally. In China, the number of deals more than doubled to 348. Compared to the United States, where more than 1,100 deals took place, China represents an active fintech ecosystem with a lot of room to grow, Accenture said.

The value of deals in America rose 46 per cent to US$16.6 billion. Despite historically being the biggest and busiest market for fintech financing, the US had no deal larger than US$1 billion in 2018, with the top deal being the US$600 million that online lender LendingPoint raised in May.

Notwithstanding uncertainty over Brexit, fintech investment in the UK also jumped more than 50 per cent to US$3.9 billion.

"Even with the current volatility in global markets and ongoing macroeconomic concerns, investment in the fintech sector remains strong," said Richard Lumb, group chief executive of financial services at Accenture.

Closer to home in Hong Kong, the number of deals grew 27 per cent to 19 deals, although funding slipped 65 per cent to US$188 million as the city recorded higher deal values in 2017.

Elsewhere there were also broad gains, with the US$542 million of investments in Japan more than five times the year-ago value; and fundraising in Australia more than doubling to US$757 million.

"Even if you discount the massive Ant Financial transaction, we'd still have a record year for global fintech fundraising, with strong activity in many corners of the world, so these are broad-based gains," said Piyush Singh, a managing director who leads Accenture's financial services practice in Asia Pacific and Africa.

"It's hard to tell whether we'll be able to keep up with this pace of torrid growth, but one thing is for sure: Many investors have woken up to the fact that fintech can add a lot of benefits to businesses and consumers alike, both in developed and developing markets, which is why we keep seeing an increase in fintech activity," added Mr Singh.