Singapore’s fintech funding rebounded to $278m in the second quarter, report finds

Singapore’s fintech investments have rebounded to US$278 million in the second quarter of 2020, a fourfold growth from US$68 million in Q1, according to a report from the Singapore FinTech Association and management consulting firm Oliver Wyman.

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Despite an initial drop in Q1 due to the coronavirus pandemic, the city-state’s fintech funding landscape hasn’t been as volatile as other Asian markets like China and India, the report noted. Fintech investment in Asia fell to US$2.4 billion in Q2 from US$3.1 billion in the first quarter of the year.

The report highlights that over 40% of Southeast Asian fintech firms are based in Singapore. The city-state recorded a total of US$2.5 billion in fintech investments between 2015 and 2019, representing 65% of the funding in the region.

Singapore was also ranked the second easiest place in the world to do business in 2019 for reasons such as ease of business establishment, foreign equity ownership, tax frameworks, contract enforcement and protection of intellectual property.

The country is is well positioned to be the regional headquarters for fintech companies, according to the report. The number of such firms in Singapore have increased tenfold, growing to over 1,000 companies in 2020 from 100 firms just five years ago. They currently employ over 10,000 people, going up from about 1,100 in 2015.

“We strongly believe Singapore is poised to come out of the pandemic stronger and once again, strengthen its position as the leading FinTech hub and financial centre in ASEAN,” said Singapore FinTech Association president Chia Hock Lai.

With rising competition in the business-to-customer scene, consumer ecosystems such as Grab and Gojek are targeting Singapore’s consumer base of over 650 million people.

“Looking ahead, Singapore fintechs are set for success as the region progresses with a common shared goal of broadening financial inclusion,” said Ben Balzer, partner at Oliver Wyman.

The report also noted a strong appetite for overseas expansion, with 95% of the surveyed companies voicing intentions to take their product or service beyond their home markets.