The Pulse of Fintech – KPMG International’s quarterly report on fintech investment details the global breakdown of financial technology activity.
Global fintech investment got off to a soft start in 2017, with the total invested globally at $3.2 billion, down from $4.15 billion in quarter four of 2016.
Total fintech funding in Asia dropped in the first three months to $492 million invested across 33 deals, reflecting a major drop off of investment in China in addition to a dearth of $100 million+ megarounds.
Venture capital funding dropped to just $406 million. Corporates however remained more resilient, with participation in Asia-based fintech deals climbing to over 30 percent.
Activity Increasing Outside China
Historically China and India have attracted the majority of fintech funding, although Hong Kong and Singapore have also developed strong fintech ecosystems. The spread of deals in the first quarter though showcased the breadth of fintech activity happening across Asia, as China and India only accounted for four of the top ten deals this quarter.
Japan, often considered a fintech laggard, picked up the baton with three early-stage deals among the top ten, while deals in Korea, Singapore and Australia rounded out the list. Prospa’s $25 million Australian dollars raise was one of the largest ever venture capital investments in an Australian fintech.
Gaining Traction in Singapore
The first quarter was a slow one for fintech investment in Singapore, with a total of 4 deals at $14.3 million. Although marked considerably by outliers, the Singapore fintech scene still enjoys hefty comparative advantages within the region as a whole, ranging from regulatory aspects to geographic positioning and access to talent.
«The Monetary Authority of Singapore (MAS) is aggressively promoting and marketing Singapore as a fintech hub for the Asia market, it’s quite evident that the MAS wants Singapore to be a no-brainer location decision,» said Chia Tek Yew, Head of Financial Services Advisory, KPMG in Singapore.
Trends to Watch for in Asia
Heading into the second quarter, Artificial Intelligence (AI) and blockchain are expected to remain big bets for fintech investors in Asia, in addition to payments, open data and data analytics.
Interest in regtech and insurtech is also projected to increase over the remainder of 2017
Fintech investment was lacklustre in the first quarter of 2017, with the total invested globally over a billion dollars down from the fourth quarter of 2016. Surprisingly Asia fell to the back of the fintech funding pack.