Investors favour smaller, early-stage fintech deals over large-scale

In H1 2024, Singapore saw 52 early-stage deals.

Investors are shifting towards smaller, early-stage fintech investments rather than large-scale deals, KPMG reported.

Singapore saw 52 early-stage deals and 32 seed rounds in H1 2024, whilst there were only 25 later-stage investments and five M&A transactions.

Globally, this was also the trend. According to Anton Ruddenklau, global head of Fintech and Innovation, Financial Services, KPMG International,  early-stage deals have been thriving "because of the interest in new technologies, such as AI applications, and newer business models to meet the changing nature of the financial services sector."

"The rise of 'platforms' continues to gain momentum as decentralisation, data aggregation and ecosystem connectivity becomes mainstream," Ruddenklau added. 

Amongst fintech sectors, KPMG reported that cryptocurrency and blockchain emerged as leaders, recording US$211.90m across 72 deals, representing a 22% increase compared to H2 2023.

Payments came in second, drawing US$80.2m across 10 deals. Singapore-based B2B platform Nium led with a US$50m venture capital raise, the largest in the ASPAC region.

The AI segment, however, saw its investments falling to US$65.62 million across 10 deals in H1’24. KPMG indicated that the increased regulatory scrutiny over the technology has slowed the deal-making process

Overall, fintech deal volume in Singapore fell 34% YoY to US$522.89 million despite a 19% YoY increase in deal count, reaching 117. KPMG attributed the volume drop to economic uncertainties.

Despite the dip, KPMG remains optimistic about the fintech investment market in Singapore, adding that it expects a backlog of fintech deals to rejuvenate the investment landscape.