• Singapore fintech investments bucked global trend, up 22 percent to US$4.1 billion in 2022, from US$3.4 billion the previous year. Top three investment areas in Singapore were Crypto/Blockchain, Payments and Wealthtech.
• Global fintech market attracts U$164.1 billion across 6,006 deals in 2022 – a strong showing despite falling from the high of US$238.9 billion seen in 2021. Top three fintech investment areas globally are Payments, Crypto/Blockchain and Regtech.
• Investors have turned to investing in non-crypto blockchain innovations after the Terra (Luna) crash and bankruptcies of Three-Arrows and FTX

SINGAPORE - Media OutReach - 16 February 2023 - Overall fintech investments in Singapore saw a year-on-year rise, hitting a three-year-high of US$4.1 billion across 250 deals in mergers & acquisitions (M&A), private equity (PE), and venture capital (VC) in 2022, according to the KPMG Pulse of Fintech H2'22. 2022's total deal value here saw a 22 percent increase, up from US$3.4 billion in 2021, and a 75 percent increase from 2020's total deal value of US$2.3 billion. The 2022 figure is also the second highest fintech investment achieved by Singapore in the past decade, after investments peaked at US$5.62 billion in 2019 just before Covid-19. Singapore's 2022 positive showing comes against the backdrop of falling global fintech investment. After reaching a record US$238.9 billion across 7,321 deals in 2021, total global fintech investment across M&A, PE, and VC dropped to US$164.1 billion across 6,006 deals in 2022. While results were substantially lower compared to 2021's peak highs for the world, 2022 was not a poor year as a whole. In fact, it was the third best year for global fintech investment and the second strongest year for global deal volume in the past decade. Globally, the top three areas for fintech investment in 2022 were Payments, followed by Crypto/Blockchain and finally RegTech. In Singapore, these top three areas of fintech investment were Crypto/Blockchain, followed by Payments and finally WealthTech. Regionally, the Americas remained the dominant force of fintech investment globally, accounting for US$68.6 billion in investment in 2022; the US accounted for US$61.6 billion of this total. The Asia-Pacific region reached a marginal new high of US$50.5 billion during 2022, while the EMEA region attracted US$44.9 billion. While the payments space attracted the largest share of fintech funding in 2022 (US$53.1 billion), Regtech was the hottest sector of the year, with investment rising from US$11.8 billion in 2021 to US$18.6 billion in 2022. "2022 was a tale of two fintech markets. The variance between the first half of the year and the second highlights the rapid shift in investor sentiment amidst a combination of challenges—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," said Anton Ruddenklau, Global Head of Financial Services Innovation and Fintech, KPMG International. "But the news wasn't all negative. Regtech, in particular, saw incredible investment in 2022, while seed-stage deals received excellent attention from investors after years of late-stage deals getting priority." KEY TRENDS

1. Investors shift to non-crypto blockchain-based solutions
   Global investments in crypto and blockchain fell to US$23.1 billion in 2022 from US$30 billion in 2021. The decline was particularly noticeable in the second half of the year as investor sentiment related to the consumer crypto space and crypto exchanges plummeted following the Terra (Luna) crash in late H1'22 and the bankruptcy of crypto hedge company Three Arrows Capital in July. In Singapore, cryptocurrency and blockchain funding in Singapore also declined 21 percent from US$1.5 billion in 2021 to US$1.2 billion in 2022.
   
   Given the FTX bankruptcy in November, it is likely that investment in crypto-focused firms will remain very slow into H1'23 as many investors work to review and significantly enhance their due diligence and governance processes related to investments in the crypto space. There could also be a shift in investment to jurisdictions with stronger regulatory frameworks for crypto activities.
   
   With consumer crypto offerings losing their lustre, investors have started to turn their attention to broader blockchain-based solutions and value propositions. This includes investing in blockchain-based technologies that underpin solutions to real-world problems, such as conducting real-time payment settlement pre-validation, streamlining cross-border payments and tokenising assets.
   
   One trend seen in 2022 that is expected to grow heading into 2023 is the shift of investors from blockchain companies focused on the retail market to startups focused on providing solutions for the SME market. One area increasingly attracting attention is the provision of SME-focused decentralised finance...