Singapore hits highest Fintech funding in 3 years, crypto $1.2 billion
Fintech investments in Singapore witnessed a three-year high of US$4.1 billion across 250 deals according to KPMG Pulse of Fintech H2’22.
2022’s total deal value here increased by 22 percent, up from $3.4 billion in 2021, and a 75 percent increase from 2020’s total deal value of $2.3 billion.
The 2022 figure is also the second highest fintech investment achieved by Singapore in the past decade, after investments peaked at $5.62 billion in 2019 just before Covid-19.
Singapore’s positive performance in 2022 comes on the back of falling global fintech investment, which fell to $164.1 billion.
The top three areas for fintech investment in the island nation were crypto/blockchain, followed by payments and finally wealthtech.
Despite being one of the top funded segments, crypto and blockchain funding in Singapore fell 21 percent from $1.5 billion in 2021 to $1.2 billion in 2022.
The Terra (Luna) crash in mid-2022, the bankruptcy of crypto hedge company Three Arrows Capital in July and the FTX bankruptcy in November contributed to this decline.
KPMG predicts that investment in crypto-focused firms will remain very slow into the first half of this year as investors improve their due diligence and governance processes.
Globally, payments remains the strongest area for fintech investment in 2022, and this was true for Singapore as well as funding in this area increased by 57 percent from $628.4 million in 2021 to $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 are likely to continue to have their margins challenged by high inflation and interest rates, the space is likely to see continued momentum.
Singapore had also seen a rally in the wealth technology sector attracting US$500 million in fintech investment in 2022, up from US$29.60 million in 2021.
One of the year’s two biggest wealthtech deals globally was the US$300 million raising 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 and the second half highlights the rapid shift in investor sentiment amid a combination of challenges – high inflation and rising interest rates, the lack of IPOs, the downward pressure on valuations, and, of course, turbulence in the crypto space.”
said Anton Ruddenklau, Global Head of Financial Services Innovation and Fintech, KPMG International.
