Singapore AI fintech funding grows in H2 2023 despite global decline

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Despite a global decline in investment activity, Singapore saw a boost in funding for AI companies focusing on fintech, according to a report by professional services firm KPMG.

Funding for the subsector in the city-state reached over US$333 million in the second half of 2023, a jump of 77% from US$148 million in the first half of the same year. There were a total of 24 investment deals for Singapore AI fintech firms throughout the whole year.

In contrast, global funding in the subsector experienced a slowdown, dropping from US$28.1 billion in 2022 to US$12.1 billion in 2023. However, KPMG believes that this decline “does not reflect a dwindling interest in AI,” as many companies strengthened their capabilities in the space through collaborations instead of direct investments.

Singapore’s fintech sector raised US$2.2 billion overall in 2023, down 68% from the previous year. The number of deals also halved to 189 over the same period.

The decline in funding also occurred in the country’s crypto and insurtech sectors, with investments reducing year on year by 86% and 25%, respectively. Despite this, crypto remained a top focus for investors in Singapore’s fintech space, with the industry seeing the highest volume of deals last year.

Last year, Singapore implemented new protective measures for customer assets in digital payment tokens. Paxos and StraitsX also obtained permission to issue stablecoins in the city-state.

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