In the first half of 2024, Singapore’s fintech market demonstrated notable resilience, with deal activity increasing by 19 percent.
according to KPMG’s Fintech Trends for the First Half of 2024In 2020, the venture capital, private equity and M&A sector saw 117 deals, compared with 98 deals in the second half of 2023.
However, total funding fell to $522.89 million, down 34% from $790.1 million in the second half of 2023.
Globally, investment in fintech is also declining, falling from $62.3 billion across 2,287 deals in the second half of 2023 to $51.9 billion across 2,255 deals in the first half of 2024.
High interest rates and economic uncertainty have led to a more cautious investment approach, shifting towards smaller, earlier stage investments.
This trend was evident in Singapore, which recorded 52 early-stage deals, 32 seed rounds, 25 later-stage investments and five M&A deals.
The cryptocurrency and blockchain sector of Singapore’s fintech market recorded US$211.9 million across 72 deals in the first half of 2024, up 22% from US$166.3 million across 38 deals in the second half of 2023.
The payments sector secured US$80.2 million across 10 deals, with notable deals including Singapore-based B2B payments platform Nium’s US$50 million venture capital raise and Indonesia-based credit card company Honest’s US$32.7 million.
This represents a significant 78 percent decrease from US$142.65 million in 14 transactions in the second half of 2023.
AI funding remained stable, with investments totaling $65.62 million across 10 deals in the first half of 2024, down from $333.13 million across 14 deals in the same period last year.
Despite the overall decline in investment, optimism remains for 2025 due to an expected recovery in fintech transactions.
Globally, only five fintech deals are expected to exceed US$1 billion in the first half of 2024, with regional activity, particularly in the Americas and Asia Pacific, showing more promise.
While the overall investment environment remains cautious, interest in the fintech sector continues to grow due to early stage transaction volumes and the rise of new technologies such as AI.
“In reality, global investment totals in the first half of the year were underpinned by a small number of large transactions, several of which were privatizations aimed at avoiding significant or further write-downs.”
Meanwhile, growing interest in new technologies such as AI applications and new business models to address the changing nature of the financial services sector is driving an increase in the number of early-stage deals globally.”
Anton Luddenklaus, Global Head of Fintech & Innovation, Financial Services, said: KPMG International.
“Higher capital costs and geopolitical uncertainty linked to conflicts and elections have had a significant impact on all global investments so far this year, and the fintech market has not been immune.
Investors are treading cautiously, especially on the M&A front, not only when it comes to large transactions given concerns about valuations and the profitability of potential targets, but also as they focus on improving the companies they already own rather than buying new ones.”
Karim Haji, Global Head of Financial Services at KPMG International, said:
Featured Image Credit: Free Pick
