KPMG Pulse of Fintech – H1'2023

• Global funding in fintech dropped 17 percent to US$52.4 billion across 2,153 deals in H1'23, while Singapore H1'23 funding fell to US$934 million across 84 deals from H2'22
• Singapore's artificial intelligence and machine learning fintechs attracted US$129 million in H1'23
• Payments, crypto and AI deals demonstrated some resilience amongst fintech subsectors within Singapore
• Americas sees fintech funding climb from US$28.9 billion in H2'22 to US$36.1 billion in H1'23 as investors enact protective measures to avoid down rounds
• With US$8.2 billion of funding, global supply chain and logistics focused fintech funding surpasses previous annual record.
• H1'23's US$1.7 billion in global green fintech funding already ahead of 2022 total

SINGAPORE - Media OutReach - 1 August 2023 - In the first six months of 2023, Singapore fintechs raised US$934 million across 84 deals in mergers & acquisitions (M&A), private equity (PE), and venture capital (VC), according to the KPMG Pulse of Fintech H1'23 - reflecting a 41 percent fall from US$1.6 billion across 117 deals in H2'22. Global trends echo local analysis with total funding and the number of deals dropping, from US$63.2 billion across 2,885 deals in H2'22 to US$52.4 billion in across 2,153 deals in H1'23. In Singapore, the fintech funding has yet to fully correct from the pandemic funding surge that began in H2'19, reflecting H1'23 performance as a three-year low, but still well above the H1'19 funding slump of US$344 million across 70 deals (see Figure 1) in the link below. Global and Singapore fintech funding reduced - KPMG Singapore The cloud of uncertainty permeating the global market continued to wear on investors, driven by factors including global macroeconomic concerns (high inflation and rising interest rates), geopolitical tensions, and tech sector challenges (depressed valuations and a continued lack of exits). The collapse of several US banks early in 2023 likely also kept many investors in "wait and see" mode during H1'23. According to the H1'23 edition of KPMG's Pulse of Fintech, a number of sectors attracted robust funding during the first half of 2023. Globally, supply chain and logistics-focused fintechs attracted US$8.2 billion in funding in H1'23—well above the space's 2019 annual record of US$5.5 billion. Green fintech also had robust interest, with US$1.7 billion of funding during H1'23— already slightly ahead of its 2022 results (US$1.5 billion). At a regional level, the Americas saw fintech funding grow—from US$28.9 billion to US$36.1 billion between H2'22 and H1'23—despite a decline in deals volume—from 1,323 to 1,011 deals—over the same timeframe. In the EMEA region, fintech funding dropped by more than 50%, falling from US$27.3 billion across 963 deals in H2'22 to US$11.2 billion across 702 deals in H1'23. Fintech funding also dropped in the ASPAC region—from US$6.8 billion across 583 deals in H2'22 to US$5.1 billion across 432 deals in H1'23. Among the top 10 fintech deals in Asia Pacific in H1'23 were (i) US$270 million raised by Singapore-based credit services firm Kredivo Holdings and (ii) US$105 million raised by Trusting Social, a Singapore-based consumer finance. Singapore attracts artificial intelligence funding of US$129 million In Singapore, artificial intelligence (AI) and machine learning funding attracted six deals amounting to US$129 million in H1'23, signifying an early growth of application in generative AI particularly in the areas of cybersecurity, insurtech and wealthtech. Similar to H1'22 and H1'21 trends, Singapore's top funded fintech sectors were payments (US$119.6 million across 8 deals) and crypto (US$234.7 million across 36 deals) in the first half of 2023. In the payment space, Singapore-based Thunes raised the largest round in the ASPAC region, amounting to US$60 million. Within the crypto space globally, Singapore has gained prominence among investors and startups as a strong forerunner. This comes as the nation has in place regulations such as the Payment Services Act and Digital Token Payment Act and is in the process of issuing regulations related to stablecoin issuance. "It is still very early days when it comes to the application of generative AI to use cases in financial services," said Anton Ruddenklau, Global Fintech Leader at KPMG. "But looking forward, it is an area that is attracting enormous interest and funding—particularly in areas like cybersecurity, regtech, and wealthtech. Over the next six months, we'll start to see an uptick in investors embracing the space as corporates demand ways to leverage generative AI effectively." Payments, crypto and AI among well-funded fintech in Singapore In Singapore, investors embraced payments, crypto as well as artificial intelligence and machine learning deals, making these verticals the top three most funded fintech...