2021 has been a remarkable year for the fintech market, with a record number of deals in every major region — including the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific. Fintech investment was incredibly strong, with both venture capital (VC) and private equity (PE) investments soaring to record highs. The breadth of fintech solutions attracting investment continued to expand and grow, with surging interest in cryptocurrencies and blockchain, wealthtech and cybersecurity.

Total global investment activity in fintech

Singapore’s fintech industry hit a five-year high at 191 deals transacted in 2021 according to the KPMG Pulse of FinTech H2’21 report. This is a 37% increase compared to 2020’s deal count (139 deals) and a 91% increase from 2019’s figures (100 deals). Total transaction value in Singapore also surged by 59% year-on-year at US$3.94 billion, across VC, PE and merger and acquisition (M&A) deals in 2021, up from US$2.48 billion in 2020.

Across 2021, there is a strong sense of renewal with numerous trends working together to drive both established companies and startups to reimagine what financial services means and what it will likely look like in the post-pandemic world.

“2021 has been an incredibly strong year for the fintech market globally, with the number of deals soaring to record highs across the board,” said Anton Ruddenklau, Global Fintech Leader, KPMG International, who is based in Singapore. “We’re seeing an incredible amount of interest in all manner of fintech companies, with record funding in areas like blockchain and crypto, cybersecurity and wealthtech. While payments remain a significant driver of fintech activity, the sector is broadening every day.”

“Cryptocurrencies and blockchain are expected to remain very hot areas of investment in 2022, with more crypto firms looking to regulators to provide clear guidance on activities in order to help foster and develop the space. In Singapore, the surge in investments into crypto and blockchain have also outpaced that of payments which long held the top spot here,” said Anton. “Given how many banks are beginning to see the major limitations inherent in their legacy architecture and technologies, we are also expecting a surge in investment into banking replacements able to help them rethink core banking services.”