Asia Pacific Posts Large Fintech Fundraising Gains in 2019

The Asia Pacific region saw large financial technology (fintech) fundraising gains in 2019, offsetting the 3.7-percent drop globally that was triggered by a sharp decline in deal activity in China, according to the new report by consulting firm Accenture.

According to the report, fintech investments in Singapore more than doubled to US$861 million in 2019, from US$365 million the previous year, putting the country as the fifth biggest fintech market by funds in the Asia-Pacific region.

About 39 percent of the total funds raised last year in Singapore went into payments startups, while insurtechs raked in 25 percent of the investments. Fintech in lending accounted for 13 percent of the total, the data showed.

Seven of the top 10 deals ever in Singapore took place in 2019. These include the US$100 million cloud company Deskera closed in May; the US$90 million from credit risk analytics and lending startup FinAccel in November; the US$90 million from insurtech Singapore Life in July; and the US$80 million from financial products marketplace GoBear in May.

Fintech investments in Hong Kong nearly doubled in 2019 to US$374 million from US$188 million in 2018, while the number of deals jumped 32 percent to 25 from 19.

The largest deal in Hong Kong was the US$156 million that WeLab, which operates mobile and online lending platforms in mainland China, Hong Kong, and Indonesia, raised in December.

The company is also among those launching virtual banks in Hong Kong this year, so part of a global trend of challenger banks raising funds to start or expand into new markets.

Other major transactions in Hong Kong included the US$100 million credit line that asset management firm FinEX Asia secured in June and the US$30 million insurtech OneDegree closed in May, as well as CompareAsiaGroup’s US$20 million raised in August and the US$15 million investment into trade finance platform Qupital in March.

“There are huge opportunities in Southeast Asia for traditional players as well as fintech startups, particularly in the consumer space, where there are millions of unbanked and underbanked people, so we will probably continue to see many companies using Singapore as a launchpad into other fast-growing markets in the region,” according to Divyesh Vithlani, a managing director at Accenture.

Fintech deals in China dropped 92 percent in 2019 to US$1.9 billion, with the US$145-million financing from insurtech Shuidi Huzhu in June being the country’s largest transaction. Most of the decline was due to China’s record-breaking fundraising in 2018, which saw four deals alone bringing in nearly US$20 billion.

Globally, the total value of fintech deals dipped 3.7 percent to US$53.3 billion from US$55.3 billion in 2018, when totals were boosted by a record US$14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies.