Singapore Fintech Association released a report in partnership with management consulting firm, Oliver Wayman which shows that the total financial technology investments jumped more than 300% in the second quarter of 2020.
The official report states that the fintech sector of the city-state attracted $278 million (S$371 million) during Q2, compared to just $68 million in the first quarter. More than 40% of South-east Asia’s fintech companies are based in Singapore, and its Government has allocated more than $200 million to grow the financial technology ecosystem in the country.
The overall funding in Asia’s fintech sector dropped significantly during the second quarter because of the coronavirus pandemic. The investments dropped to $2.4 billion in Q2, compared to $3.13 billion in Q1 as China and India reported a substantial dip in funding.
“Interestingly, in 2020, Singapore has demonstrated resilience amidst the COVID-19 pandemic. While the COVID-19 pandemic has resulted in a fall in overall FinTech funding in Asia (particularly in China and India), the funding landscape in Singapore has been less volatile. Despite an initial decline in funding, Singapore’s FinTech investments rebounded in the second quarter of 2020, with investors recognising the opportunities existing in Southeast Asia. This support for FinTechs in Singapore stands in contrast to other markets in the region, where many FinTechs, especially early-stage businesses, have struggled to cope with the impacts of the pandemic,” the report states.
Singapore showed outstanding growth in the fintech sector in the last 5 years. The total number of fintech companies jumped to 1,000 in 2020, compared to just 100 in 2015. The country now has nearly 10,000 employees related to the fintech sector, compared to around 1,100 in 2015.
“Singapore is increasingly becoming a hub that includes data centres, regional talent, and diversified sources of capital. We have seen meaningful acceleration on this, and despite the COVID-19 pandemic, global investors have been injecting funds into Singapore FinTechs, an indication of the strength of our ecosystem,” Pradyumna Agrawal, Director of Investment at Temasek, said in a statement.