Asian fintech funding exceeds $1b in 2017

Singapore River skyline.

Asia experienced a solid increase in fintech investment in Q3 2017, with $1.21 billion raised across 41 deals. China accounted for more than 50 per cent of all Asian fintech investment at $745 million.

Notably, corporate participation in Asia fintech venture capital (VC) deals remained high at 22 per cent of overall round counts, although actual direct investment was minimal in 2017 with just $840 million invested YTD in associated deal value.

Over the next few quarters, corporate VC (CVC) investments are expected to grow as more traditional corporates look to make strategic investments, with Asia forecast to see additional fintech hubs in different jurisdictions.

“The fintech market continues to rapidly evolve with an increasing diversity of funding participation and sources, geographic spread and areas of interest,” says Ian Pollari, Global Co-Lead, KPMG Fintech.

“We are seeing the emergence of fintech leaders who are looking to expand internationally to scale their platforms, as well as large technology giants moving into adjacencies to create new value for their customers. This is a trend that is expected to continue and could force incumbent financial institutions to take bolder steps in response.”

In China, the focus of startups is expected to continue to shift more to B2B solutions given the expanded controls over consumer-facing activities. P2P lending is also expected to evolve as a result of new regulations, with larger players in the space continuing to grow, reflecting a larger trend towards consolidation and convergence.

In Singapore, an Indo-Asia Pacific business hub, the fintech sector saw $25.3 million over six deals in Q3 2017, with the Monetary Authority of Singapore (MAS) continuing to be the key driver of the city-state’s fintech ecosystem.

With 2018 a key checkpoint year for Singapore’s Smart Nation 2020 strategy, the MAS’s focus on innovation is only expected to grow. The regulator has already launched 10 Blockchain projects at various stages.

“The MAS is putting a lot of emphasis into the development of blockchain, with high expectations for successful pilot projects heading into 2018. In addition to blockchain, regtech is also a high priority for fintech in Singapore. Applications in regtech ranges from using AI to make workflow processes more efficient to finding ways to provide real time or near-real time monitoring of transactions,” said Chia Tek Yew, Head of Financial Services Advisory at KPMG Singapore.

According to KPMG’s Pulse of Fintech report, which used data compiled by capital markets database Pitchbook, total global fintech funding continues to remain strong, with $8.2 billion invested in Q3 2017, after more than doubling to $9.3 billion in Q2.

Although deal volume declined, Q3 2017 investment stood well above the $6.3 billion raised in Q3 2016. VC investment in fintech in Q3’17 saw a five-quarter high of $3.3 billion, although the total was well shy of the record $7.4 billion raised in Q3’15. The US led in terms of global fintech investment in Q3’17, with $5 billion deployed across 142 deals, while Europe and Asia lagged considerably behind. European fintech deals accounted for $1.66 billion of investment across 73 deals.

Despite healthy investment activity, early-stage investments (i.e. seed and angel stage rounds) declined to 67 deals for Q3 2017, a low not witnessed since Q1 2013, reflecting a shift towards larger deals and higher quality companies with proven business models.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.