Spike in investments into S'pore-based fintech firms

$650m raised in first half of year, including record $462m in equity funding, says report

Despite the Covid-19 pandemic, investments into Singapore-headquartered fintech firms rose sharply in the first half of this year, said a report on Friday.

A flurry of investments in April and last month made up for a quiet first quarter, bringing total fundraising to $650 million, including a record high of $462 million in equity funding.

This came as investors made larger bets on businesses relevant in the current environment, said the report by BCG FinTech Control Tower (FCT), a research-focused unit developed jointly by the Boston Consulting Group and Expand Research.

Investors targeted relatively more mature fintechs well positioned to accelerate their growth, with a big jump in mid-stage Series C+ funding especially in April and last month.

Fintech firms offering banking services to small and medium-sized enterprises saw the biggest growth in investments of about 210 per cent for the first half of the year up to mid-June, over the first six months of last year. These were followed by fintechs in the technology line, which saw equity funding grow by about 180 per cent year on year. The SME banking and technology clusters together drew some $288 million in investments, noted the report.

BCG FCT worked with the Monetary Authority of Singapore (MAS) to analyse fintech equity-funding data to compile the report.

It said that fintech mergers and acquisitions came to more than $185 million in the first half of the year.

These include Grab's acquisition of Bento, a B2B robo-adviser and digital wealth technology provider; GoBear's acquisition of AsiaKredit, a consumer lending platform; and AMTD Group's acquisition of CapBridge, a private capital platform, and Policypal, which allows users to compare and purchase insurance online, said the report.

However, the total number of fintech deals fell marginally to 41 in the first five months of this year, down from 44 in the same period last year, though the average deal size was about 20 per cent larger.

MAS chief fintech officer Sopnendu Mohanty said that amid the recovery from the pandemic, fintech has a great opportunity to make a meaningful impact this year 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."

BCG FCT managing director and global lead Pauline Wray said the fintech ecosystem is maturing in Singapore, with the five-year effort since the first supportive policies by MAS "now coming to fruition".

She added that especially as Covid-19 accelerates the move to digital, "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".

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A version of this article appeared in the print edition of The Straits Times on June 22, 2020, with the headline Spike in investments into S'pore-based fintech firms. Subscribe