Fintech investments in Singapore cross billion-dollar mark

Start-ups raise more money in first 9 months than all of last year: Accenture

Financial technology start-ups raised more money in the first nine months of this year than in the whole of last year.

About US$735 million (S$1 billion) was poured into fintech-related deals, a 69 per cent increase from the same period last year, professional services firm Accenture said yesterday, noting that the amount exceeded the $642 million raised in the whole of last year.

But the report also said investors are betting more on mature start-ups than newbies that are just getting off the ground.

Angel and seed funding for the earliest stage of capital raising fell 56 per cent to US$54 million, with the number of deals down by 46 per cent to 29 from January to September this year.

Series funding for more established start-ups jumped 66 per cent to US$442 million, although deal numbers remained at 44 in the same period.

Mr Divyesh Vithlani, Accenture's head of financial services in Asean, said the shift represents a maturing market that is more interested in supporting established players. "This steady flow of funds shows investors' confidence in the future growth potential of the fintech industry in Singapore," he said.

He added that the digital bank licences the Monetary Authority of Singapore (MAS) plans to issue will present more opportunities for fintech start-ups and traditional banks to work together.

MAS chief fintech officer Sopnendu Mohanty said crossing the billion-dollar investment threshold is recognition of the potential that Singapore and South-east Asia hold.

"Fintech investment in Singapore has increased nearly sixfold year on year from 2015," he added. "It's encouraging to see local start-ups financing their global growth from Singapore."

He noted that a number of global fintech companies with regional headquarters in Singapore have also raised sizeable amounts to fuel regional expansion.

Investors were most interested in start-ups in the payment, lending and insurance tech space.

Deals involving payment start-ups have hit US$251 million so far this year, a 113 per cent jump from the same period last year.

Insurtech funding rose 2.7-fold to US$128 million from US$35 million, while lending rose 51 per cent to $145 million from $96 million in the same period.

The leading deals include Deskera's US$100 million raised in May, GoBear's US$80 million that same month, and the US$45 million raised by ShopBack in April.

Deskera is a cloud company; GoBear compares financial products; and ShopBack offers users cash back for their purchases, among other services.

Accenture worked with the MAS and data and analytics providers CB Insights, Pitchbook and Tracxn on the report.