Singapore’s fintech industry witnesses a 3-year record of 72 deals worth US$614.2 million in the first half of 2021

  • Ace Global
  • December 30, 2021

The fintech industry in Singapore saw a three-year high in transactions in the first half of this year as companies accelerated their digital transformation.

The sector recorded 72 transactions valued at $ 614.2 million (Singapore $ 833.8 million) from Jan 1 to June 30, an increase of 22% year over year over the 59 transactions last year and 50% more than last year. According to KPMG data in its industry report published on Tuesday, 48 deals were closed in the first half of 2019.

Analysts note that this is in line with the global trend for companies to increase their risk and investment activity after coming under increasing pressure to accelerate their digital transformation and improve their digital skills.
Singapore fintech firms are conducting lower-value transactions compared to last year, with a total amount of over $ 1.02 billion traded in the first half of 2020. However, the transaction value of $ 614 million traded in the first half of 2021 is still double the value of $ 302.6 million recorded in the same period two years ago.

This trend, according to KPMG, is in line with a decline in financing for companies and their risk industries, given the consolidation and the emergence of clear category leaders in all countries and regions. These larger companies tend to no longer need capital or have already gone public.

KPMG predicts that valuations for Singapore’s fintech landscape could rise in the next six months amid the explosion of U.S. Special Purpose Acquisition Companies (SPACs), which are expected to have more interest in Singapore startups here. Grab, of course, makes history in SPAC’s $ 40 billion mergers with Altimeter Growth Corp, which is expected to finish in the second half of this year.

In terms of the most frequently targeted fintech types, KPMG reports that payment companies hold the top spot in investors’ wallets worldwide and also have by far the highest transaction value ($ 19 billion in the first half of 2021) compared to other fintech segments. Finance solutions embedded into retail applications and ecosystem platforms, along with the “buy now, pay later” sub-sector, are attracting great interest from investors.

Another segment to consider is cryptocurrency and blockchain, where financial technology companies in this sector have accumulated US8.7 billion worth of transactions in the first half of this year. Significant inflows of institutional money into the sector are an indication of a widening investor base, awareness, and knowledge of crypto assets and their operational aspects.

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