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With $3 Billion expected in 2021, new fintech capital: Singapore

With $3B expected in 2021, Singapore is becoming a fintech capital

Investment in fintech is surging back following a brief but notable drop during the COVID pandemic.

As a result, countries worldwide are seeing a large influx of capital for fintech ventures, and both investment totals and deal counts in the fintech space are increasing rapidly.

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Although a large part of financial tech funding focuses on countries such as the United States and the United Kingdom, smaller countries, particularly in Asia, are making their presence known.

This is hardly surprising given that Asia leads the world in financial tech adoption rates.

Singapore is one country building a solid reputation as a hub of financial tech activity, and this reputation is generating substantial investment.

Singapore’s fintech investment surges forward

According to KPMG, total funding worldwide in the first half of 2021 reached $98 billion from 2,456 deals, rebounding strongly from the COVID-inspired investing dip of 2020.

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Not surprisingly, the U.S. accounted for most of the total investment at $42 billion. However, financial tech funding also recovered well in Asia and the EMEA region.

For the first half of 2021, Asian financial tech funding activity amounted to $7.5 billion despite the lack of any notably large deals.

CBInsights estimates that Asian fintech funding in Q3 is strong at nearly $6 billion, trailing only the U.S.

Despite its small size (less than 5 million total population), Singapore is quickly reaching investment levels of countries many times its size.

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Although the KPMG data shows only $614 million during the first half, the Singapore Monetary Authority’s chief fintech officer, Sopnendu Mohanty, suggests a strong surge in the second half, pushing Singapore’s total to $3 billion. Given the record number of deals in the first half of 2021, Mohanty’s optimism seems justified.

Compare Singapore’s total to countries like Canada and the major European countries. In the first half, Canada’s total investment was $4.8 billion, while France and Germany were each in the $2 billion-$2.5 billion range.

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But these countries are six to ten times the size of Singapore and have similarly larger GDPs.

Singapore’s investment level is also notable among countries in the Asia Pacific. The two most populated countries, China and India, generated only $1.3 billion and $2 billion, respectively. Australia had less than a billion.

Singapore is swinging well above its weight when it comes to fintech investment.

Fintech adoption drives investment

Fintech adoption continues to grow rapidly, and the pandemic only provided additional fuel for the fire. Adoption rates in Europe, for example, accelerated by 72% in 2020 alone.

Source: TechCrunch

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