Funding

Singapore Hits Highest Fintech Funding in 3 Years, Crypto Snagged US$1.2 Billion

Fintech investments in Singapore witnessed a three-year-high of US$4.1 billion across 250 deals according to the KPMG Pulse of Fintech H2’22.

2022’s total deal value here saw a 22 percent increase, up from US$3.4 billion in 2021, and a 75 percent increase from 2020’s total deal value of US$2.3 billion.

The 2022 figure is also the second highest fintech investment achieved by Singapore in the past decade, after investments peaked at US$5.62 billion in 2019 just before Covid-19.

Singapore’s 2022 positive showing comes against the backdrop of falling global fintech investment which dropped to US$164.1 billion.

The top three areas of fintech investment in the island state were crypto/blockchain, followed by payments and finally wealthtech.

However, despite being one of the top funded segments, crypto and blockchain funding in Singapore did decline by 21 percent from US$1.5 billion in 2021 to US$1.2 billion in 2022.

The Terra (Luna) crash in mid 2022, bankruptcy of crypto hedge company Three Arrows Capital in July and the FTX bankruptcy in November contributed to this decline.

KPMG predicts that the investment in crypto-focused firms will remain very slow into the first half of this year as investors enhance their due diligence and governance processes.

Globally, payments remain the strongest area of fintech investment in 2022 and this was true for Singapore as well as funding in this area rose by 57 percent from US$628.4 million in 2021 to US$984.8 million.

It is worth noting that Buy Now Pay Later (BNPL) continues to drive interest despite valuation and regulatory challenges.

Although BNPL firms will likely continue to have their margins challenged by high inflation and interest rates, the space will likely see continued momentum.

Singapore had also experienced a wealthtech sector rally attracting US$500 million in fintech investments in 2022, up from US$29.60 million in 2021.

One of the two largest wealthtech deals of the year globally was the US$300 million raise by Singapore-based crypto trading firm Amber Group.

Source: Pulse of Fintech H2’22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 31 December 2022

Anton Ruddenklau

“2022 was a tale of two fintech markets. The variance between the first half of the year and the second highlights the rapid shift in investor sentiment amidst a combination of challenges—high inflation and rising interest rates, the lack of IPO exits, the downward pressure on valuations, and, of course, the turbulence in the crypto space.”

said Anton Ruddenklau, Global Head of Financial Services Innovation and Fintech, KPMG International.