Singapore hit record-high fintech investment in 2017 at US$229M: Report
The number was driven by major fintech deals in the last quarter of 2017 in Asia, which happened to take place in Singapore
Singapore achieved a record high US$229 million fintech funding in 2017, according to the latest KPMG Pulse of Fintech report.
The number was driven by major deals in the last quarter of 2017 in Asia such as GoSwiff’s US$100 million acquisition by Paynear Solutions and Smartkarma’s US$13.5 million Series B funding round, which happened to take place in the country.
The progress was made despite the dropping number of fintech funding in the Asian region generally.
Having hit US$1 billion in Q3 2017, total fintech funding in Asia dropped to US$748 million across 38 deals in Q4 2017, with VC funding dropping “almost” 50 per cent quarter-over-quarter to US$550 million.
Annually, total fintech funding in the region was US$3.85 billion in 2017, a steep decline compared to US$10 billion in 2016.
The drop is attributed to the decrease of fintech investment in China; the country saw just US$45.8 million in investment in Q4 2017 while total investment in 2017 was US$1.3 billion.
Regarding trends, the report noted that corporate participation in fintech investment increased rapidly from 11 per cent in Q3 2017 to over 31 per cent in Q4 2017.
“As the sector matures, investors have shifted from experimenting with fintech to seeking out value-driven opportunities. This is particularly true for corporates who continue to invest and see fintech as a strategic play that will help accelerate their digital transformation agendas,” said KPMG Fintech Global Co-Lead Ian Pollari in a press statement accompanying the report.
The report also predicted a “renewal in fintech activity in China” influenced by successful IPOs by China-based unicorn startups and growing clarity in fintech regulation.
The rise of blockchain
On a global level, fintech funding rose “marginally” from US$8.5 billion in Q3 2017 to US$8.7 billion in Q4, bringing the total number during the year to US$31 billion. The number was the same level of investment as 2016.
It is also important to note that global fintech deals dropped from 327 deals in Q3 2017 to 307 deals in Q4. VC deals dropped from 227 to 250, while PE deals reached a record high during the year with 139 deals (US$17 billion).
The report stated that while it is noticeable, the decline has been “far more moderated” when compared to the decline of deal activity in other tech sectors.
It also confirmed the rising popularity of blockchain as the sector saw “record level” of VC investment and deal volume in 2017, together with insurtech. While insurtech accounted for US$2.1 billion across 247 deals, blockchain generated US$512 million of investment across 92 deals.
Despite the rise of alternative fundraising such as ICO, VC investment in blockchain achieved another record high in 2017 with US$512 million.
In addition to startups, government in various countries have begun to develop the use of blockchain.
The report gave an example of the Monetary Authority of Singapore (MAS), which had been working with three Asian banks to develop a blockchain proof-of-concept (PoC) to streamline know-your-customer (KYC) processes.
In other Southeast Asian countries such as Indonesia, central bank Bank Indonesia has been looking into the use of blockchain while national postal service Pos Indonesia has implemented the technology to run current account services.
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