SINGAPORE – Financial technology enterprises successfully raised an all-time high of S$ 1 billion or US$735 million during the year’s first nine months, according to a report released on Tuesday by Accenture.
The report detailed that fintech deals from January to September 2019 reflected a 69 per cent increase from the US$435 million raised during the same period last year. During the first three quarters alone, the total amount raised was more than US$642 million raised in 2018.
The global consultancy firm noted that there was an increase in the value of investments injected into the fintech firms since, upon closer inspection, the deals were not as high compared with the same period last year. The number of deals actually fell by as much as 29 per cent from 133 to 94. This data shows that investors have more confidence in the market by infusing larger bets into lesser deals. The report also noted that most investments went to more established startups, as investments for new startups significantly fell both in number (-46 per cent) and value (-56 per cent).
Conversely, established startups received more investments amounting to US$442 million or 66 per cent, while the number of deals remained the same. Notably, the majority of funding was injected to payment startups, with as much as 34 per cent of the total investments. The total number of deals also increased by 60 per cent, as more investors see the potential of payments space, especially that Singapore now prepares to shift to issuing digital banking licenses in the next few months.
One of the biggest funding recipients are insurance tech startups, posting roughly 73% increase from US$35 million to US$128 million. Insurance tech startups accounted for 17 per cent of the funds raised.
Monetary Authority of Singapore (MAS) chief fintech officer Sopnendu Mohanty is positive that this all-time high fintech investment is a clear indication of investors’ recognising Singapore’s efforts in breaking into the fintech ecosystem.
He added, “It’s encouraging to see the local startups financing their global growth from Singapore. Mohanty also shared that most global fintech companies based in Singapore also increased funding to support their expansion to Asia.
With this, it looks like Singapore is closing in on its goal of becoming the first smart nation.
Back in 2014, PM Lee Hsien Loong made a bold announcement that Singapore aims to become the world’s first smart nation come 2030. MAS, along with other stakeholders, are now hard at work at promoting the fintech ecosystem of Singapore.