SINGAPORE - Fintech investments in Singapore for the nine months ended Sept 30 jumped 69 per cent to US$735 million (S$1.01 billion) from US$435 million in the same year-ago period, according to research from professional services firm Accenture.
The number of fintech deals fell by almost one-third (29 per cent) to 94 from 133, showing that investors made larger bets into fewer deals as start-ups grew their business, said Accenture.
Angel and seed funding that focuses on the earliest stage of capital raising for start-ups dropped 56 per cent to US$54 million, and the number of those deals declined 46 per cent to 29.
Series funding, which typically targets companies looking to grow their business with external capital as they mature, increased 66 per cent to US$442 million, although the number of deals was relatively unchanged at 44 versus 43 in the first nine months of 2018.
Besides the funding shift towards more mature companies, payment start-ups and insurance technology (insurtech) firms also received significant monies.
Investments in payment start-ups accounted for 34 per cent of fintech fundraising, the lending category took 20 per cent, and insurtechs took 17 per cent.
The value of payments deals more than doubled to about US$251 million from US$117.5 million, making the biggest contribution to overall gains this year, said Accenture.
Lending rose more than 50 per cent to about US$145 million from US$95.7 million, while insurtech funding nearly quadrupled to US$128 million from US$35 million.
However, the number of lending and insurtech deals declined more than 40 per cent, while the number of deals with payments start-ups soared 60 per cent.
The pickup in both the value and number of deals for payments start-ups indicates that investors still see a lot of potential opportunities in that segment, said Accenture.
The pickup comes as fintechs and traditional financial firms look for ways to collaborate amid Singapore's issuance of digital banking licences in the coming months.
"As we've seen in other parts of the world, fundraising is shifting to support the scaling up of challenger and collaborative fintech, which will cause lumpiness in some rounds as the market becomes more mature," said Divyesh Vithlani, a managing director at Accenture and head of financial services in the Asean region.
"This steady flow of funds shows investors' confidence in the future growth potential of the fintech industry in Singapore. The upcoming unveiling of virtual banking licences will bring even more opportunities for fintech start-ups and traditional banks to partner and cooperate."
The Monetary Authority of Singapore's (MAS) chief fintech officer Sopnendu Mohanty said: "Crossing a billion-Singapore-dollar investment threshold is recognition from investors around the world of the potential of Singapore's fintech ecosystem and the outlook for digital financial services not just in Singapore, but also in South-east Asia.
"It's encouraging to see the local start-ups financing their global growth from Singapore. Additionally, several global fintech companies with regional headquarters in Singapore have recently raised sizeable funds to fuel their Asian expansion."
For the report, Accenture Research worked with MAS to analyse fintech investment data from global venture-finance data and analytics providers CB Insights, Pitchbook and Tracxn.
The analysis included financing activity from venture capital and private equity firms, corporations and corporate venture capital divisions, hedge funds, accelerators and government-backed funds.
The investment data ranged from 2015 through the first nine months of 2019 and included equity and non-equity financing.
A previous report by Accenture, which analysed data from CB Insights, showed fintech investments in Singapore nearly quadrupled to US$453 million in the first half of 2019, up from US$118 million in the year-ago period.