SINGAPORE – Media OutReach Newswire – 6 August 2024 – The first half of 2024 demonstrated resilience and adaptability within Singapore’s fintech market, with significant growth in deal activity. Deal activity surged by 19 percent, reaching 117 deals across venture capital (VC), private equity (PE), and mergers & acquisitions (M&A) in H1’24, compared to H2’23 – according to the latest edition of KPMG’s Pulse of Fintech for H1’24. This period saw Singapore fintechs raising US$522.89 million, reflecting a 34 percent decrease from US$790.10 million across 98 deals in H2’23. On the global stage, fintech investment fell from US$62.3 billion across 2,287 deals in H2’23 to US$51.9 billion across 2,255 deals in H1’24.
The increased caution among investors, driven by high interest rates and economic uncertainties, has resulted in a tighter funding environment. Consequently, there is a noticeable shift towards smaller, early-stage investments rather than large-scale deals. In Singapore, this trend is evident with 52 early-stage deals, 32 seed rounds, 25 later-stage investments, and 5 M&A transactions recorded.
“The reality is that the overall global investment total for the first half of the year was buoyed by a handful of large deals, several of which were take privates aimed at avoiding significant or further valuation loss,” said Anton Ruddenklau, Global Head of Fintech and Innovation, Financial Services, KPMG International. “Meanwhile, the volume of early-stage deals globally has been thriving both because of the interest in new technologies, such as AI applications, and newer business models to meet the changing nature of the financial services sector. The rise of “platforms” continues to gain momentum as decentralisation, data aggregation and ecosystem connectivity becomes mainstream.”
Cryptocurrency & Blockchain, Payments and AI Segments Dominate Deal Activity
Reflecting a cautious investment approach, blockchain and digital assets have seen increased regulatory scrutiny. The cryptocurrency and blockchain segments of Singapore’s fintech market recorded US$211.90 million across 72 deals in H1’24, a 22 percent uptick from the US$166.30 million over 38 deals recorded in H2’23. Singapore has been focused on developing and enhancing robust risk management frameworks for digital asset tokenisation, recently announcing an initiative to scale asset tokenisation within financial services.
Globally, crypto and blockchain stabilised at US$3.2 billion, despite previous declines. While deal sizes were relatively small, deal volume remained good, with 677 deals completed during H1’24 — well on pace to exceed the number of deals seen last year by a solid margin.
The payments segment in Singapore secured the second-highest investment attracting US$80.20 million across 10 deals in H1’24, though this marked a 78 percent decline from US$142.65 million across 14 deals in H2’23. Notably, the largest payments deal in the ASPAC region involved a US$50 million venture capital raise by Singapore-based B2B payments platform Nium. Singapore’s payments activity includes dynamic payment architectures and cross-border payment solutions and embedded payments solutions On a global scale, the payments segment led fintech investment in H1 2024, drawing US$21.4 billion.
AI funding saw stabilisation following its surge in H2’23, with investments falling to US$65.62 million across 10 deals in H1’24, down from US$333.13 million over 14 deals. The AI segment, characterised by complex technologies that necessitate substantial upfront investment and longer return timelines, has faced increased regulatory scrutiny. This scrutiny has slowed the deal-making process as companies and investors adapt to new compliance requirements and economic uncertainties.
| H1 2024 | H2 2023 | H1 2023 | ||||
| Deal size US$ (million) | No of deals | Deal size US$ (million) | No of deals | Deal size US$ (million) | No of deals | |
| Reg Tech | $2.2 | 2 | $12.80 | 3 | $1.3 | 2 |
| Insur Tech | $35 | 2 | $284.10 | 4 | $4.1 | 1 |
| WealthTech | – | – | $35 | 2 | – | – |
| Proptech | – | – | $0.50 | 2 | $0.2 | 1 |
| Cybersecurity | $3 | 2 | – | 1 | $0.1 | 1 |
| Payments | $80.20 | 10 | $142.65 | 14 | $43.49 | 10 |
| Crypto | $211.90 | 72 | $166.30 | 38 | $460.50 | 50 |
| AI & ML deals | $65.62 | 10 | $333.13 | 14 | $148.08 | 10 |
Figure 1: Singapore’s fintech segment deal values and volume for H1 2024 to H1 2023
Optimism for 2025 Amid Fluctuating Fintech Investments
Over the past five years, the fintech sector in Singapore has experienced notable fluctuations. The period before the pandemic saw slowing deal-making, followed by a post-pandemic surge, peaking at US$3.27 billion in H1’22. However, recent economic headwinds have tempered this momentum, leading to smaller deal sizes and slower large-scale funding. Despite this, there is optimism for 2025, with expectations of a backlog of fintech deals potentially rejuvenating the investment landscape.
Global fintech mega-deals shrink while regional activity shows optimism
Globally, only five US$1 billion+ fintech deals occurred in H1’24, including the buyouts of US-based Worldpay for US$12.5 billion, Canada-based Nuvei for US$6.3 billion, US-based EngageSmart for US$4 billion, UK-based IRIS Software Group for US$4 billion, and Canada-based Plusgrade for US$1 billion. The largest VC deal was a US$999 million raise by UK-based Abound.
Despite the decline in total investment, regional deal volume showed promise. While deal volume globally dipped slightly, the decline was driven entirely by a decline in deal volume in EMEA—from 804 in H2’23 to 689 in H1’24. Comparatively, the Americas saw deal volume rise from 1,066 to 1,123, while ASPAC saw it rise from 406 to 438 in ASPAC, suggesting underlying resilience.
“The high cost of capital and geopolitical uncertainty linked to conflict and elections, have put a significant damper on all global investments so far this year, and the fintech market isn’t immune to that,” said Karim Haji, Global Head of Financial Services, KPMG International. “Investors are acting cautiously, not only when it comes to large transactions, particularly on the M&A front, given concerns about valuations and the profitability of potential targets, investors are focussed on improving the companies they already own rather than buying new.”
Global Key Highlights
1. Interest in AI heating up in fintech space
AI was quite hot in the eyes of fintech investors in H1’24, particularly in the Americas. The US in particular saw four large AI-focused deals; cyber insurance company Corvus was acquired by Travellers for US$427 million, compensation-focused platform Spiff was acquired by Salesforce for US$419 million, corporate management company Ramp raised a US$150 million VC round, and investment management platform FundGuard raised a US$100 million VC funding round. China-based AI-powered sustainability data company MioTech also raised a US$150 million VC round in H1’24.
2. After a slow 2023, investment in payments and regtech rebound
After a very quiet year of investment in 2023, both the payments sector and the regtech sector saw VC investment rebound quite solidly in H1’24. The payments space attracted US$21.4 billion in investment during H1’24, compared to the US$22.7 billion seen during all of 2023, while regtech attracted US$5.3 billion in investment, compared to just US$3.4 billion during all of 2023. Meanwhile, insurtech investment dried up significantly in H1’24—attracting US$1.6 billion in investment—less than one-quarter of the US$8.2 billion seen in 2023.
3. Americas sees small drop in fintech investment; number of deals rises
Fintech investment in the Americas was US$36.7 billion in H1’24—down slightly compared to the US$38.5 billion in H2’25. The US accounted for US$27.4 billion of this investment, including the US$12.5 billion acquisition of Worldpay by GTCR, the US$4 billion buyout of B2B customer engagement platform EngageSmart by Vista Equity Partners, the US$930 million acquisition of financial research firm Tegas by AlphaSense, and the US$685 million VC raise by capital markets platform company Clear Street.
Fintech investment in Canada reached a record high of US$7.8 billion for a six-month period in H1’24, driven by the US$6.3 billion acquisition of payments firm Nuvei by Advent International and the US$1 billion buyout of revenue solutions firm Plusgrade by General Atlantic. Meanwhile Brazil had a quiet quarter of fintech investment, attracting just US$616 billion in H1’24 compared to US$1.8 billion in H2’23.
4. ASPAC region sees slowest quarter of investment since Q3’17
Fintech investment in the ASPAC region fell from US$4.6 billion in H2’23 to $3.7 billion in H1’24. Much smaller deal sizes accounted for the decline, with a US$280 million VC raise by China-based capital markets solutions firm Yi’an Enterprise accounting for the largest deal of the quarter, followed by a US$209 million VC raise by India-based personal loan platform KreditBee, a US$195 million VC raise by Thailand-based digital financial solutions firm Ascend, and US$150 million VC raises by China-based ESG financial solutions firm MioTech and Australia-based performance management firm Camms.
5. EMEA region sees 40 percent drop in fintech funding
Fintech funding in the EMEA region fell 40 percent, from US$19 billion in H2’23 to just US$11.4 billion in H1’24. Continued geopolitical uncertainty, including elections in the EU, UK, and France, combined with the high interest rate environment kept investment quite subdued. The UK accounted for the largest share of fintech investment in the EMEA region (US$7.3 billion), including the US$4 billion buyout of financial software company IRIS Software Group by Leonard Green, the US$999 million VC raise by SMB marketplace platform Abound, and a US$621 million raise by neobank Monzo. Outside of the UK, the largest deals included the buyout of Italy-based payments firm Banco BPM Gruppo for US$652 million and the acquisition of Switzerland based e-invoicing company Pagero by Thomson Reuters.
6. Early-stage deals provide most optimism heading into H2’24
Fintech investment is expected to remain subdued in H2’24 given the high interest rate environment and resulting high cost of capital, in addition to the approach of the US presidential election. AI will likely be the hottest area of investment as startups work to tailor AI solutions specifically to the financial services sector. There is some optimism that deal volume will continue to increase, but average deal sizes will likely remain small compared to historical norms.
Hashtag: #KPMG
The issuer is solely responsible for the content of this announcement.
KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.
KPMG firms operate in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.
KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. For more detail about our structure, please visit kpmg.com/governance.
Prime Minister of Viet Nam Pham Minh Chinh’s visits to three Middle Eastern countries have…
JAKARTA, INDONESIA - Media OutReach Newswire - 9 November 2024 - In a significant move…
BEIJING, CHINA - Media OutReach Newswire - 8 November 2024 - Since its inception more…
Acquisition Expands TBS’ Regional Waste Management Platform in Indonesia and Singapore, aligning with its TBS2030…
KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 8 November 2024 - It’s that time…
BARCELONA, SPAIN - Media OutReach Newswire - 8 November 2024 - On November 6, Central…