Fintech investments hit $1.01b in 9M 2019

Investment value in mature fintechs expanded to $604.97m despite the lower number of deals.

Total value of financial technology (fintech) deals in Singapore jumped to almost $1.01b (US$735m) in the first nine months of 2019, a 69% YoY rise compared to the $585.38m (US$435m) recorded over the same period in 2018, according to a report by Accenture. The value also exceeded the $878.71m (US$642m) raised in 2018. 

The latest figures indicate that fintech investment has multiplied sixfold since 2015, noted Sopnendu Mohanty, chief fintech officer of the Monetary Authority of Singapore (MAS).

Accenture noted that investors made larger bets yet fewer deals as of 30 September, as the number of fintech deals fell by almost one-third (29%) to 94 compared to the 133 transactions recorded in 2018. This was driven by investors shifting capital to more-mature companies looking to grow their business.

Payments startups made the biggest contribution to the gains of the period as the value of payments deals skyrocketed 113% to $343.54m (US$251m). Lending also rose more than 50% to $198.46m (US$145m). Investments in payments startups and those in lending took the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively.

The pickup in both the value and number of deals for payments startups indicates that investors still see a lot of potential opportunities in that segment, particularly as fintechs and traditional financial firms look for ways to collaborate as Singapore prepares to issue digital banking licenses in the coming months, the report noted.

Also read: MAS opens applications for new digital bank licences

Insurtech funding nearly quadrupled to $175.19m (US$128m) from $47.95m (US$35m) last year, raking in 17% of the total investments.

Series funding, which typically targets companies looking to grow their business with external capital as they mature, expanded 66% to $604.97m (US$442m), although the number of deals was relatively unchanged at 44, versus 43 in the first nine months of 2018.

In contrast, angel and seed funding—focusing on the earliest stage of capital raising for startups just getting their business off the ground—dropped 56% to $73.91m (US$54m). The number of early stage deals declined 46% to 29.

“As we’ve seen in other parts of the world, fundraising is shifting to support the scaling up of challenger and collaborative fintech, which will cause lumpiness in some rounds as the market becomes more mature,” said Divyesh Vithlani, a managing director at Accenture and head of financial services in the ASEAN region. “This steady flow of funds shows investors’ confidence in the future growth potential of the fintech industry in Singapore. The upcoming unveiling of virtual banking licenses will bring even more opportunities for fintech startups and traditional banks to partner and cooperate.”