FINTECH investments in Singapore more than doubled to US$861 million in 2019 from the year before, led by big gains in funding to payments and insurtech startups.
The number of deals in Singapore rose 52 per cent to 108, according to Accenture, which analysed data from CB Insights, a global venture-finance data and analytics firm.
With US$861 million in funding bagged in 2019, Singapore is now the fifth-largest fintech market by funds in the Asia-Pacific, behind India, China, Australia and South Korea.
The country saw seven deals of US$25 million or more, which together made up 77 per cent of total deal value last year.
About 39 per cent of the total funds raised went into payments startups, while insurtechs raked in 25 per cent of the investments. Fintechs in lending accounted for 13 per cent of total investments, the data showed.
Blockbuster deals closed in Singapore in 2019 include US$90 million raised by credit risk analytics and lending startup FinAccel in November, US$90 million bagged by insurtech Singapore Life in July, and US$80 million raised by financial products marketplace GoBear in May.
Divyesh Vithlani, a managing director at Accenture and Asean financial services lead, said broad interest in the new digital banking licences and the strong growth in fintech investments last year bodes well for the future development of the Singapore fintech ecosystem.
"There’s been a lot of focus on payments startups and solutions the past years, but we may see a shift in investment trends going forward as some of the new digital banks come onboard and we see more and more companies targeting the commercial banking space with new products and solutions for SMEs (small and medium enterprises) that have been underserved by traditional banks," said Mr Vithlani.
"There are huge opportunities in South-east Asia for traditional players as well as fintech startups, particularly in the consumer space, where there are millions of unbanked and underbanked people, so we will probably continue to see many companies using Singapore as a launch pad into other fast-growing markets in the region."
The Accenture analysis noted that investments into challenger banks globally have more than tripled in 2019 to US$5.2 billion, from US$1.6 billion the year before.
The leap was led by the US$726 million raised by Italian digital bank and card processor Nexi, the US$683 million from South Korea’s Naver Financial, and the US$700 million that digital bank Chime raised in two separate transactions in the US.
Fintech investments in Hong Kong nearly doubled in 2019 to US$374 million from US$188 million in 2018, while the number of deals increased 32 per cent to 25 from 19.
The largest deal in Hong Kong was the US$156 million that WeLab, which operates mobile and online lending platforms in China, Hong Kong and Indonesia, raised in December. The company is among those launching virtual banks in Hong Kong.
Meanwhile, fintech deals in China dropped 92 per cent in 2019 to US$1.9 billion. Most of the decline was due to China’s record-breaking fundraising in 2018, which saw four deals alone bringing in nearly US$20 billion.
Investments in India nearly doubled to US$3.7 billion, making the country the world’s third-largest fintech market by funding.