Singapore fintech investments double in 2018

The Business Times by RACHEL MUI


FINTECH investments in Singapore more than doubled to US$365 million last year, up from US$180 million the year before, placing the Republic among the top five fintech markets by funds raised in the Asia-Pacific last year.

An analysis by Accenture noted, however, that within the region, Singapore lags behind Australia, China, India and Japan.

The consulting firm analysed data from global venture-finance data and analytics firm CB Insights, and its observations covered the years between 2010 and 2018, and included equity and non-equity financing.

The number of deals in Singapore rose from 61 in 2017 to 71 last year, working out to a rise of 16 per cent, said Accenture.

The analysis defined fintech companies 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 in Singapore took place last year. These include the US$60 million raised by cloud company Deskera in November, US$52 million by insurtech Singapore Life in December, and US$32 million raised by crypto currency and blockchain startup Terra.

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

Divyesh Vithlani, Accenture's managing director of financial services in Asean, 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 has 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 level of activity bodes well for the future expansion of new technologies in many different areas of finance."

Globally, investment in fintech ventures more than doubled to US$55.3 billion in 2018, led by a surge in funding in China, and strong gains in several other markets as investors placed larger bets in more mature startups, Accenture said.

This growth was mainly due to the value of deals in China multiplying - by nine times - to US$25.5 billion in 2018; this 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 funding raised by Ant Financial, which operates mobile-payments service Alipay and is an affiliate of Alibaba Group Holding.

Globally, the number of fintech deals rose 19 per cent to 3,251. In China, the number of deals more than doubled to 348. Compared to the United States, where more than 1,100 deals took place, China represents an active fintech ecosystem with a lot of room to grow, Accenture said.

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

Notwithstanding uncertainty over Brexit, fintech investment in the UK jumped more than 50 per cent to US$3.9 billion.

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

In Hong Kong, the number of deals grew 27 per cent to 19, although funding slipped 65 per cent to US$188 million. The city had recorded higher deal values in 2017.

Elsewhere, there were also broad gains, with the US$542 million of investments in Japan more than five times the year-ago value; fundraising in Australia more than doubled to US$757 million.

Piyush Singh, a managing director who leads Accenture's financial services practice in the Asia-Pacific and Africa, said: "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, so these are broad-based gains. It's hard to tell whether we'll be able to keep up with this torrid pace of 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."