Singapore fintech investments more than double to $492m in 2018: Accenture

The Singapore FinTech Festival 2018 was held last November at the Singapore Expo. An Accenture report released yesterday said that investment in Singapore hit US$365 million (S$492.4million) last year, up from US$180 million in 2017. This puts the Re
The Singapore FinTech Festival 2018 was held last November at the Singapore Expo. An Accenture report released yesterday said that investment in Singapore hit US$365 million (S$492.4million) last year, up from US$180 million in 2017. This puts the Republic behind only Australia, China, India and Japan in the Asia-Pacific region.PHOTO: LIANHE ZAOBAO

Fintech investments more than doubled last year to make Singapore one of the region's leading centres.

Investment hit US$365 million (S$492.4 million), up from US$180 million in 2017, according to a report out yesterday.

It also said that Singapore lags behind only Australia, China, India and Japan in fintech investment in the Asia-Pacific region.

There were 71 deals struck here last year, 16 per cent ahead of the 61 in 2017, according to Accenture, which defined fintech firms as those offering technologies for banking and corporate finance, capital markets, financial data analytics, insurance, payments and personal financial management.

Eight of the top 10 largest deals ever made here also took place last year. These included the US$60 million raised by cloud-computing company Deskera last November, insurer Singapore Life's US$52 million last December and the US$32 million collected by blockchain start-up Terra.

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

Mr Divyesh Vithlani, managing director of financial services for Asean at Accenture, 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 have 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 bodes well for the expansion of new technologies in many different areas of finance."

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

This growth was mainly due to the value of deals in China multiplying by nine-fold to US$25.5 billion last year, 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 last year, thanks largely to the US$14 billion 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, deal numbers more than doubled to 348. Compared with the United States, where more than 1,100 deals took place, China has a lot of room to grow, Accenture said.

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

LOCAL MARKET MATURING

The size of the market and the value of deals still have 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 bodes well for the expansion of new technologies in many different areas of finance.

MR DIVYESH VITHLANI, managing director of financial services for Asean at Accenture.

Fintech investment in Britain jumped more than 50 per cent to US$3.9 billion despite uncertainty over Brexit.

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

Elsewhere, the US$542 million of investments in Japan was more than five times the level in 2017, while fundraising in Australia more than doubled 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," said Mr Piyush Singh, who leads Accenture's financial services practice in the 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."

A version of this article appeared in the print edition of The Straits Times on March 01, 2019, with the headline 'S'pore fintech investments more than double to $492m in 2018: Accenture'. Print Edition | Subscribe