Financial technology fundraising in Singapore has soared this year as investors focus on mature startups in the payments and online insurance sectors.
Singaporean fintech companies raised $735 million in the first nine months this year, according to management consultant group Accenture. That represented a 69% increase from the same period last year.
While fundraising reached new heights, the number of deals dropped by 29% compared to last year. Of the 94 deals completed from January to the end of September 2019, 29 involved early-stage capital raising. This represented a 46% decline in the number of seed funding deals year-on-year.
In contrast, series funding saw a 66% increase as investors write fewer - but bigger - checks to maturing startups in the region.
"These comprehensive figures show that fintech investment in Singapore has increased nearly six-fold year-on-year from 2015," said Sopnendu Mohanty, chief fintech officer at Singapore's Monetary Authority.
A breakdown of investments by product-type reveals the growing popularity of insurance startups amongst investors. Funding in insurtech over the last nine months has more than doubled year-on-year to reach $125 million.
Singaporean payment businesses also fared well and received the largest chunk of funding. Buoyed by the rise of virtual banking, they raked in a total of $250 million over 37 deals.
Singapore is following in the footsteps of Hong Kong, which started to embrace virtual banking earlier this year by granting licenses, according to panelists at FinanceAsia’s China Fixed Income Summit in the city last month.
“The Hong Kong Monetary Authority (HKMA) hasn’t issued a banking license for more than 40 years and then all of a sudden they issued eight virtual banking licenses in Hong Kong this year,” said Frederic Lau, vice chairman of AMTD Group.
“The upcoming unveiling of virtual banking licenses will bring even more opportunities for fintech startups and traditional banks to partner and cooperate,” Divyesh Vithlani, a managing director at Accenture, predicts.