Singapore fintechs raised S$656m in Q1, up 355%

FINTECH companies based in Singapore raised about S$656 million in the first quarter of 2021, up 355 per cent from the year before.

A report released by the Boston Consulting Group says that the sum raised in the first three months of the year already amounts to about 46 per cent of the total funding raised in 2020.

Grab Financial Group's Series A round of more than US$300 million in January drove much of the fund-raising value. Other large rounds included the US$30 million investment by Indonesian company Payfazz in Xfers, a payments processing startup, and a S$23 million Series A round by robo-advisory platform Endowus.

Companies operating in the business lines of retail banking, capital markets and technology gained the strongest funding so far, the report found. Fintechs in the retail banking space took home S$483 million.

Fintech funding in Singapore has been on an upward trajectory over the past years. From 2016, funding grew at an annual rate of 47 per cent to about S$1.4 billion in 2020.

Among the largest investments in 2020 was a S$396 million round in AMTD Digital, a Singapore subsidiary of investment banking firm AMTD group.

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Sopnendu Mohanty, chief fintech officer of the Monetary Authority of Singapore, said: "Despite the challenges brought about by Covid-19, the fintech sector, with the support from various resiliency programmes, leveraged the fast-growing digital shift of the Asian economy to anchor itself on a sustainable path of growth."

A number of fintech merger and acquisitions were announced in 2020. Grab acquired Bento, a business-to-business robo-advisory platform, while digital life insurer Singlife merged with Aviva in a deal valued at S$3.2 billion.

Last year, Singapore became the first country in South-east Asia to issue digital banking licences. Companies that won a licence include Sea, a Grab-Singtel tie-up, Ant Group, and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.

Pauline Wray, global lead of the BCG Expand FinTech Control Tower, said: "International players view Singapore as a strategic gateway to the region due to the availability of capital, favourable business environment, strong technology and banking talent pool, and a robust licensing application and vetting process which provides successful applicants with a credibility 'brand premium'."