SINGAPORE (Aug 1): Total global fintech investment more than doubled 2Q17 to US$8.4 billion ($11.4 billion) from US$3.6 billion in 1Q17, according to KPMG’s Pulse of Fintech report.
The increase was mainly due to global M&A investment, which saw US$5.9 billion in deal value for the quarter.
Conversely, global venture capital (VC) funding to fintech companies saw a drop with US$2.5 billion raised in 2Q.
In Singapore, investment into fintech was also up q-o-q at US$61.5 million, despite the declining volume of fintech deals.
KPMG says historical trends show that this is not out of the ordinary and may be a result of Singapore moving towards a more partnership-oriented fintech model.
Meanwhile, the Monetary Authority of Singapore continues to drive majority of the fintech activity in Singapore, as it shifts its focus to promoting technology adoption and attracting companies to launch offerings in Singapore.
Although Asia is seeing a lack of megadeals, KPMG says its total fintech funding seemed to be relatively steady q-o-q with US$760 million invested in 51 deals in 2Q17 compared to US$790 million across 56 deals in 1Q17.
Strategic players in Asia also reveal an interest in fintech innovation as corporate participation continues to grow in Asia, with CVC investment growing from 22.5% in 1Q17 to a record high of 36.6% in 2Q17.
Chia Tek Yew, Head of Financial Services Advisory at KPMG in Singapore, says, “Over the longer term, MAS hopes to see more fintechs using Singapore as a base to pilot and then deploy solutions into other countries within Southeast Asia, such as Indonesia and Thailand. The success of these cross-border solutions could prove the viability of using Singapore as a springboard for Asia-based expansion.”
