Blockchain deals boost SG fintech funding to highest in 5 years: report

Singapore’s fintech industry hit a five-year high at 191 deals transacted in 2021, a 37% rise from 139 deals in 2020, said a KPMG report.

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The city-state saw its total transaction value for fintech deals surge by 59% year-on-year, amounting to US$3.9 billion in 2021, noted the KPMG Pulse of FinTech H2’21.

The report attributed this growth to Singapore’s crypto and blockchain space continuing to see rising interest. For the past two years, investments in crypto and blockchain companies have outpaced the funding received by payments firms.

Singapore saw record levels of investment in crypto and blockchain, with nearly US$1.5 billion transacted across 82 deals in 2021 as compared to US$109.7 million over 26 deals in the previous year. The report noted that majority of the crypto and blockchain deals in the city-state last year went toward software and underlying infrastructure rather than services.

“Cryptocurrencies and blockchain are expected to remain very hot areas of investment in 2022, with more crypto firms looking to regulators to provide clear guidance on activities in order to help foster and develop the space,” said Anton Ruddenklau, global fintech leader at KPMG International.

While funding in the payments space fell behind crypto and blockchain investments, there was a 10x increase in the value of payments-related deals locally. Total funding in the space grew from US$60 million in 2020 to US$628.4 million in 2021.

A continued interest in areas like buy now, pay later, embedded banking, and open banking-aligned solutions have helped keep the payments space robust, noted the report.

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Global fintech funding topped US$210 billion across a record 5,684 deals in 2021. Grab’s listing through a SPAC merger at US$500 million, which resulted in a post-money valuation of US$39.6 billion, was the fourth largest fintech deal in Asia Pacific last year, said the KPMG report.