Investments flood Singapore fintechs in April, May after quiet Q1

Total equity funding reached a record-high US$331m.

Singapore-headquartered fintechs saw a sharp increase in investments in April and May, a recovery from the downturn seen in Q1, as investors injected funds into large firms relevant to the current environment, according to a BCG FinTech Control Tower report.

Total equity funding hit a record-high US$331m (S$462m) YTD, showing solid confidence in the sector. H1 2020 also saw a high level of M&A activity with total deals crossing US$132m (S$185m), including Grab’s acquisition of B2B robo-adviser provider Bento, GoBear’s acquisition of AsiaKredit, and AMTD’s acquisition of CapBridge.

Fintechs in the SME banking and technology lines led the uptick, which rose around 210% and around 180%, respectively, over the same period last year. From a product vertical perspective, payments and lending drove a significant portion of the increase, which attracted a combined US$206m (S$288m), accounting for about 60% of the total equity funding to date in 2020.

The total number of deals fell to 41 from 44 in the first five months of the year, but the average deal size has increased by 20%, as the demands for financial activities to move online in Southeast Asia surged, the report added.

In addition, there was a 30% drop in investment in seed/early stage fintechs, whilst mid-stage series C+ funding jumped 180% to US$127m (S$177m) as investors target relatively more mature fintechs that are well positioned to accelerate their growth during this period, the report concluded.