Singapore is Asia's third biggest fintech market by funds: Report

Accenture research notes that $630m 1st-half investment here is nearly four times that of year-ago period

Financial technology (fintech) investments in Singapore nearly quadrupled to US$453 million (S$630 million) in the first half of this year, up from US$118 million in the same period a year ago - placing the country as the third largest fintech market by funds in the Asia-Pacific, just behind China and India.

This is according to the latest research by Accenture, which analysed information from CB Insights, a global venture capital data and analytics firm.

In particular, the number of deals closed in Singapore rose by 55 per cent to 48, from 31 in the first half of last year.

About 28 per cent of the total funds raised in the period went to insurance technology firms, or insurtechs. Fintech firms in payments took 27 per cent and those in lending took 25 per cent, the data showed.

Five of the top 10 deals in Singapore took place in the first six months of the year. These include the US$100 million raised by cloud company Deskera in May; the US$80 million raised by financial products marketplace GoBear, also in May; and a US$45 million equity funding round closed by cashback platform Shopback in April, which was co-led by Rakuten and EV Growth.

Mr Divyesh Vithlani, a managing director at Accenture and the company's practice lead for Asean financial services, said: "The increase both in deal value and the number of deals is a good indicator of what's to come, and bodes well for the future development of cutting-edge financial technology in Singapore.

"There's a lot brewing in the Singapore fintech ecosystem, and this steady flow of funds shows investors' confidence in the industry's future growth potential. The forthcoming virtual banking licences will help create more opportunities for fintech start-ups and traditional banks to partner and cooperate, and should add another wave of investments in the sector."

Five of the top 10 deals in Singapore took place in the first six months of the year. These include the US$100 million raised by cloud company Deskera in May; the US$80 million raised by financial products marketplace GoBear, also in May; and a US$45 million equity funding round closed by cashback platform Shopback in April, which was co-led by Rakuten and EV Growth.

Globally, investment in fintech ventures fell sharply in the first half of this year, as fundraising and deal activity in China - which had soared a year earlier - ground to a halt, partially offsetting strong gains in the United States, United Kingdom and a number of other European countries, Accenture noted.

For the six months ended June 30, the total value of fintech deals globally came in at US$22 billion, down 29 per cent from US$31.2 billion recorded last year.

The drop was due mostly to the lack of a mega deal such as Ant Financial's record US$14 billion fundraising in May last year.

Discounting this transaction, global fintech investments would have climbed 28 per cent in the first half of this year over the same period last year, Accenture said.

Specifically, the value of deals in the US jumped 60 per cent to US$12.7 billion, though the number of transactions was virtually unchanged from the same period last year, signalling a trend of larger deals in the world's biggest and most active fintech market, the report highlighted.

Meanwhile, fintech investments in the UK nearly doubled to about US$2.6 billion, with the number of deals rising 25 per cent to 263, as challenger banks and payments companies continued to draw investors' interest.

Money-transfer start-up TransferWise, for instance, closed a US$292 million deal in May this year.

In Hong Kong, fundraising posted a near sevenfold increase in the first six months of this year, with start-ups there raking in US$152 million - compared with just US$23 million last year - led by the US$100 million credit line that asset management firm FinEX Asia secured in June. The number of deals in the city also doubled to 12 from six a year ago.

A version of this article appeared in the print edition of The Straits Times on August 16, 2019, with the headline 'S'pore is Asia's third biggest fintech market by funds: Report'. Print Edition | Subscribe