KPMG: Singapore’s Fintech Investment Tops US$3.94 Billion, Crypto Takes Top Spot

KPMG: Singapore’s Fintech Investment Tops US$3.94 Billion, Crypto Takes Top Spot

by February 8, 2022

Singapore’s fintech industry hit a five-year high at 191 deals transacted in 2021 according to the KPMG Pulse of FinTech H2’21 report.

This is a 37 percent increase compared to 2020’s deal count with 139 deals and a 91 percent increase from 2019 where 100 deals were recorded.

Total transaction value in Singapore also surged by 59 percent year on year at US$ 3.94 billion, across venture capital (VC), private equity (PE) and merger and acquisition (M&A) deals in 2021, up from US$ 2.48 billion in 2020.

One significant deal involved Singapore tech group, Grab, which listed a SPAC deal in the United States at US$500 million, resulting in a post-money valuation of US$39.6 billion that made it among the top four fintech investments in Asia Pacific in 2021.

Overall, fintech funding in the Asia-Pacific region grew to US$27.5 billion in 2021 (US$17.4 billion in H2’21).

VC funding also bounced back – rising from US$11.5 billion in 2020 to US$19.6 billion in 2021.

Source: Pulse of Fintech H2’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 31 December 2021.

KPMG reports that fintech funding for crypto and blockchain takes top spot in Singapore while payments drops to second place here at US$628.41 million despite remaining the favourite globally.

Singapore saw record levels of investment in crypto and blockchain with US$ 1.48 billion transacted across 82 deals in 2021, as compared to US$ 109.75 million over 26 deals in 2020.

Majority of the crypto and blockchain deals for Singapore in 2021 went towards software and underlying infrastructure, rather than services.

Cryptocurrencies are expected to receive continued attention from regulators in Singapore as the city-state tries to balance the benefits of financial innovation with any inherent risks associated with this space.

There was however a notable 9-fold (946 percent) increase in payments-related deals locally, up from US$ 60 million in 2020.

A continued interest in areas like ‘buy now, pay later’, embedded banking, and open banking aligned solutions have all helped keep the payments space robust.

Anton Ruddenklau

Anton Ruddenklau

“Cryptocurrencies and blockchain are expected to remain very hot areas of investment in 2022, with more crypto firms looking to regulators to provide clear guidance on activities in order to help foster and develop the space.

 

In Singapore, the surge in investments into crypto and blockchain have also outpaced that of payments which long held the top spot here.”

said Anton Ruddenklau, Global Fintech Leader, KPMG International, who is based in Singapore.