Singapore FinTechs off to a flying start in 2021
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Singapore FinTechs off to a flying start
in 2021
Raising over half a billion dollars in equity funding following a record year in
2020 and the approval of four digital bank licenses.
By Jason Han, Guglielmo De Stefano, Ian Loh and Pauline Wray
“We’re happy to see that Singapore Fintechs continue to attract increasing
amounts of funding and we see this trend continuing even stronger in the
future. The fertile ground created by the progressive Singapore regulators, as
well as the network effect and collaborative ecosystem offers a unique envi-
ronment for visionaries and entrepreneurs to build and grow their Fintech
businesses out of Singapore, and SFA is working to provide even more sup-
port in the journey.”
— Shadab Taiyabi, President of the
Singapore Fintech Association
2020 marked the fifth anniversary of Singapore’s bold Other large rounds include S$41 million Series B rounds
move to create the world’s leading FinTech Festival. Today, in Xfers, a payment processing gateway designed to offer
Singapore is recognised as one of the world’s leading credit card processing and internet banking transfers, as
FinTech hubs. well as imToken, a DLT-powered, decentralized digital
wallet and exchange, and a S$23 million Series A round
Funding data shows homegrown FinTechs raised ~S$656M in Endowus, an MAS-licensed platform allowing users to
in equity funding in Q1 this year. This is 355% higher com- invest their CPF and Supplementary Retirement Scheme
pared to Q1 of last year, and already amounts to ~46% of (SRS) money as well as cash. Overall FinTechs operating in
total funding raised in 2020. This large figure is in part the business lines of Retail Banking, Capital Markets and
driven by Grab Financial Group’s Series A round of over Technology have gained the strongest funding traction in
SG$417 million in January to continue building its Digital 2021 so far. (see Exhibit 1)
Financial Services.
BOSTON CONSULTING GROUP 1
Exhibit 1 - Equity funding amounts Q1 2020 vs Q1 2021, S$ million
660
45
24
80
24
+355%
484
145
8 8
10
47
58
Q1 2020 Q1 2021
Retail banking Technology SME banking Support
Capital markets Wealth management Insurance Corporate banking
Source: BCG FinTech Control Tower
This stellar start to 2021 comes on the back of a re- ever despite the outbreak of COVID-19. More impressively,
cord-breaking year for FinTechs in Singapore. In 2020 (see this comes after 5 years of accelerated growth in equity
Exhibit 2), FinTechs raised a resounding ~S$1.4 billion in funding for the local FinTech ecosystem, with a CAGR of
equity funding, representing the highest annual amount 47% observed between 2016 and 2020.
Exhibit 2 - Equity funding amounts by business line, S$ million
+34%
1,401
36
~47% 43
56
24
2016 - 2020 53
CAGR 1,045
218
33 32
43
100
671 418
578 27 306
33
41
39 31 41
122 144 217
117
183 161 81 554
45
56 216 193 233
53
2016 2017 2018 2019 2020
Retail banking Technology SME banking Support
Capital markets Wealth management Insurance Corporate banking
Source: BCG FinTech Control Tower
2 SINGAPORE FINTECHS OFF TO A FLYING START IN 2021The largest three rounds of 2020 (see Exhibit 3) include a In a strong sign that Singapore‘s FinTech ecosystem is
S$396 million round in AMTD Digital, a Singapore subsidi- gradually maturing, five Series C rounds were raised in
ary of investment banking firm AMTD Group which aims 2020. This included for NIUM, Funding Societies, AI-pow-
to connect a variety of Asian markets and create a one- ered fraud prevention platform Advance.ai, digital wealth
stop digital solutions platform, an undisclosed Series C management platform StashAway and core banking plat-
round in digital cross-border money transfer platform form MatchMove. Hailing from a range of business lines,
NIUM and a S$41.7 million Series C round in peer-to-peer this demonstrates the rich diversity of FinTechs which are
lending platform Funding Societies. flourishing in Singapore.
“What we’ve seen in 2020 is the acceleration of existing trends in Mr Sopnendu Mohanty, Chief FinTech Officer of the Monetary
FinTech, which has been bolstered by significant increases in Authority of Singapore, said, “The record investment in the
investment and capital available in the region in recent years. We FinTech sector in 2020 demonstrates the depth and growing
were likely going to get to this point in FinTech adoption eventually, maturity of Singapore’s FinTech ecosystem. Despite the challeng-
but necessity has forced change almost overnight in some areas. es brought about by COVID-19, the FinTech sector, with the
For example, in terms of how people purchase goods, lockdowns support from various resiliency programs, leveraged the
have forced the adoption of cashless payment options. fast-growing digital shift of the Asian economy to anchor itself on
a sustainable path of growth.”
FinTechs were able to pivot and adapt quickly to deliver special-
ized services that customers needed. As a result, investor interest
has continued to be strong in FinTech companies..” – Amra
Naidoo, co-founder and general partner of Accelerating Asia
Exhibit 3 - Equity funding amounts by business line in 2020-20211,
S$ million
548
26 503
86 69
237
26 425 428
24 143
98
62 149 84 54 47 67
41 42 33 31
44 72 56 28 43 27
Jan ‘20 Feb ‘20 Mar ‘20 Apr ‘20 May ‘20 Jun ‘20 Jul ‘20 Aug ‘20 Sep ‘20 Oct ‘20 Nov ‘20 Dec ‘20 Jan ‘21
Retail banking Technology SME banking Support
Capital markets Wealth management Insurance Corporate banking
Source: BCG FinTech Control Tower
Note: The logos represent selected examples of FinTechs with large fundraising rounds in the relevant month.
As of Jan 31st, 2021.
1
BOSTON CONSULTING GROUP 3In addition, 2020 registered a number of FinTech M&A The announcement attracted strong interest in these
deals, such as: licenses, with 21 applications submitted featuring consor-
tiums of established firms from across financial services,
• AMTD Digital’s three strategic acquisitions of block- telecommunications, e-commerce, and other industries.
chain-powered price comparison app PolicyPal in March Four license winners were announced at the end of 2020:
2020, QR-powered digital payment service provider
FomoPay in July 2020 and blockchain-powered primary • Two Digital Full Bank licenses to a Grab-Singtel tie-up
issuance platform CapBridge in June 2020; and consumer internet company Sea
• Grab’s acqusition of Bento, a B2B robo-advisor and • Two Digital Wholesale bank licenses to China’s Ant
digital wealth technology provider, bringing retail wealth Group and a consortium comprising Greenland Finan-
management and investment solutions to its ecosystem cial Holdings, Linklogis Hong Kong, and Beijing Co-oper-
of users; and ative Equity Investment Fund Management
• Full stack digital life insurer Singlife’s acquisition of All eyes will be on these players as they set their sights on
~75% of Aviva Singapore; by joining forces, the two com- capturing the large share of unbanked digital savy custom-
panies aim to build a strong brand, combining Singlife’s ers in the wider region. (see Exhibit 4)
technology with Aviva’s industry experience.
“International players view Singapore as a strategic gateway to
“2020 has proven that Singapore has succeeded in being recog- the region due to the availability of capital, favorable business
nized by investors as well as entrepreneurs as a global FinTech environment, strong technology and banking talent pool, and a
hub with a vibrant sustainable ecosystem.” – Melissa Guzy, robust licensing application and vetting process which provides
Co-Founder and Managing Partner of Arbor Ventures successful applicants with a credibility “brand premium”.
The FinTech scene in Singapore is set to grow from While the Singapore market alone is relatively small, the large
strength to strength, as it welcomes a new era of digital underbanked and unbanked population in the region is a huge
banking. Singapore recently became the first country in opportunity. With an emerging middle class and a young and
Southeast Asia to issue digital banking licenses, with the digitally engaged demographic, neighboring countries are attrac-
aim of harnessing new technologies to improve financial tive markets for digital services.” – Pauline Wray from BCG
inclusion, drive innovation and encourage competition. FinTech Control Tower
Exhibit 4 - Tremendous opportunity to serve the unbanked and under-
banked across the Southeast Asia region
Bank Account Penetration (age 15++) (%)
Financial inclusion on
97 96 96 85 the rise in SEA with more
80 72 78 81
66
37 49 people entering the
32 32 27 32 35
20 22 banking system
Singapore Malaysia Thailand Indonesia Vietnam Phillipines
2011 2014 2017
Bank Account Usage in 2019 (%)
97 85 82 Usage of bank accounts
67 remains low but
39 40 50 35
23 19 32 23 19 increasing rapidly
17 14 16 14 11
Singapore Malaysia Thailand Indonesia Vietnam Phillipines
Account Penetration % Save at a Financial Institution % Borrowed at a Financial Institution %
Source: IMF, BCG Analysis, BCG FinTech Control Tower, Singapore FinTech Association
4 SINGAPORE FINTECHS OFF TO A FLYING START IN 2021“For a business like Tyme that is focused on digital banking in • An additional funding of $30 million for the existing Dig-
South East Asia, Singapore is the perfect home base. In our ital Acceleration Grant scheme (DAG), to encourage the
recent fundraise of US$110m, we were delighted to see the industry to adopt digital solutions that enhance produc-
enthusiasm for Singapore from all of our investors. The regulato- tivity, cyber security, and operational efficiency
ry environment and many benefits the Singapore government
offers to FinTechs is creating an ecosystem of players here in “The RegTech grant scheme will ensure a thriving RegTech ecosys-
Singapore that drew us to the city.” – Coen Jonker, Executive tem not just from a supply side but also from the demand side.
Chairman of Tyme Despite COVID-19, RegTechs have had significant success with
fundraising and are achieving scale. A virtuous cycle of mutual
Adding to this momentum is the MAS announcement* on enablement is happening across an ecosystem of RegTechs,
30 April 2021 committing S$42 million towards a RegTech Banks, Insurers, FinTechs and Supervisors. The explosion of data,
grant scheme, while enhancing the Digital Acceleration continued digitalization and the rising complexity of regulation
Grant Scheme (DAG). and cost of compliance are amongst the key drivers for organiza-
tions using RegTechs to more efficiently and effectively carry out
• A two track RegTech grant scheme: Risk, Compliance and even Supervisory duties. Singapore rises
firmly to the challenges of the digital age by supporting the
• Under the pilot track, FIs can seek funding to pilot proliferation of such start-ups.” – Pauline Wray, Co-Head BCG
potential RegTech solutions before embarking on FinTech Control Tower
full-scale integration of the product into its operating
environment. Funding for this track will be capped at
S$75,000
• Under the production level project track, FIs can seek
funding to develop larger scale customised proj-
ects that can be fully integrated into the FI’s sys-
tems. Funding for such projects will be capped at
S$300,000”
Exhibit 5 - Despite COVID19 uncertainty, ‘20H1 investments grew by a
further 16% on top of record funding in ‘19H2
CAGR
Equity funding by cluster, ($M) RegTech cluster ‘19H1 –‘20H1
+16%
Data Compliance Management Data Compliance
1,227 +729%
+196% Management
Implementation & Governance
Monitoring 1,054 Implementation
349 - 60%
Regulatory Analysis & Governance
215
Reporting
Monitoring +105%
Risk Analysis 37
Verification 323
Regulatory
-
448 Analysis
495 20 11
3
394
348 356 Reporting - 14%
40 302
25 284 42 8 26
271 18 15 38
11 144
193 191 513
177 177 98 158
19 11 35 17 32 11 11
Risk Analysis - 72%
113 60 17 23 288
110 33 99 25
20 114 155 15
17 87 109 132 99
41 18 20 81
26 28
Verification +415%
2015H1 2015H2 2016H1 2016H2 2017H1 2017H2 2018H1 2018H2 2019H1 2019H2 2020H1
1. Mega rounds defined as >USD100m 2. CAGR = Compound Annual Growth Rate
Source: BCG FinTech Control Tower
https://www.mas.gov.sg/news/media-releases/2021/mas-commits-42m-to-spur-adoption-of-technology-solutions
BOSTON CONSULTING GROUP 5Methodology BCG FinTech Control Tower worked closely with the Mone- tary Authority of Singapore to analyse Fintech equity funding data from Crunchbase, Dealroom, Venture Capital Insights and interviews with FinTechs and VCs. FinTech companies are defined as those that offer financial services directly or provide enabling technologies to financial institutions, facili- tating the provisioning of financial services. 6 SINGAPORE FINTECHS OFF TO A FLYING START IN 2021
About the Authors Pauline Wray is the Global lead of the BCG Expand Guglielmo De Stefano is a Lead Analyst with BCG Ex- FinTech Control Tower, and the Head of BCG Expand pand FinTech Control Tower. He has led multiple global in Asia. studies on FinTechs and InsurTechs. Ian Loh is a Principal with BCG Expand FinTech Control Jason Han is an Analyst with BCG Expand FinTech Control Tower based in the Singapore office. He leads the research Tower. Prior, he worked in management consulting and at a team FinTech startup For Further Contact If you would like to discuss this report, please contact the authors. BCG FinTech Control Tower (FCT) is a research-focused unit developed jointly by the Boston Consulting Group (BCG) and Expand Research. The FCT identifies initiatives, technologies, and companies that matter most in today’s FinTech ecosystem and assesses their impact. We engage directly with financial institutions, regulators, industry stakeholders and innovators via bespoke consulting services, deep-dive industry reports as well as a self-service FinTech intelligence platform which will launch shortly. Through gathering data on FinTechs via data providers and primary interviews, we map players based on a proprietary taxonomy based on their businesses, product offerings and more. For more information, visit us at www.fintechcontroltower.bcg.com * Note: An exchange rate of $1.39 USD/ SGD has been applied for all numbers presented in this article. For information or permission to reprint, please contact BCG at permissions@bcg.com To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com
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