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Singapore leads fintech funding in Asia-Pacific: KPMG report

A new report from global consulting giant KPMG has identified Singapore as the world’s leading destination for fintech funding. In its KPMG Pulse of Fintech H2 ’22, the city-state bagged the Asia-Pacific region’s biggest winner in a year marked by unfavorable macroeconomic conditions.

Singapore’s fintech funding for 2022 amounted to an impressive $4.1 billion in 250 deals. The deals cut across mergers and acquisitions, private equity, and venture capital funding, with payments technologies, wealth tech, and blockchain technology being the biggest recipient.

KPMG notes that the $4.1 billion attained in 2022 was a 75% increase from the $2.3 billion recorded in 2020. However, fintech funding in Singapore peaked during the last decade in 2019 at $5.62 billion before the COVID-19 pandemic.

The rest of the Asia-Pacific region recorded stellar numbers as they cumulatively reached 50 billion in fintech investments. The EMEA (Europe, Middle East, and Africa) region followed closely with $44.9 billion in 1,977 deals during the year, propelled by regtech and payments.

“While both the Americas and Europe saw fintech investment decline, the Asia-Pacific region slightly surpassed 2021’s peak on the back of the Afterpay acquisition,” read the report.

Anton Ruddenklau, KPMG’s global head of financial services innovation and fintech, explained that investments in Europe and the Americas were stifled by “high inflation and rising interest rates, the lack of IPO exits, the downward pressure on valuations, and, of course, the turbulence in the crypto space.”

The figures attained by Singapore were not a fluke, as the country has taken several deliberate steps to attract international investment in its digital ecosystem, including establishing clear legal frameworks.

A silver lining to the dark cloud

2021 was an impressive year for fintech funding, with KPMG recording an impressive $238 billion in over 7,000 deals. On the other hand, 2022 could only manage to notch 164 billion, a decline of around 30% from the highs of 2021.

Despite the disparity in figures, KPMG believes there are still small wins in 2022, like the number of deal volumes and seed deals achieved. The consulting firm noted that the volume of regtech investment “soared to a new high.” At the same time, the regional diversification was also impressive as less mature hubs also received their fair share of funding.

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