Singapore and Vietnam fintech lead investor funding in 2019

Vietnam and Singapore commanded the lion’s share of money raised for the first nine months of 2019, making up 87% of the US$1.14 billion raised across Southeast Asia by financial technology firms.

US$1.14 billion is by no means puny, as compared to the $679 million of investor funds raised in 2018.

A joint report published recently by PricewaterhouseCoopers (PWC), United Overseas Bank (UOB), and the Singapore FinTech Association revealed these interesting numbers just as Singapore welcomed 60,000 people from 130 countries to its annual FinTech Festival last week.

“Singapore’s favourable regulatory and business environment, strong investor interest and maturing FinTech sector continue to make it an attractive base for firms that are looking to tap ASEAN’s growth potential”, observes Janet Young, Head of Group Channels and Digitalisation at UOB.

In fact, she foresees more fintech companies in Singapore attracting later stage rather than pre-series funding. Of the US$1.14 billion raised in the ASEAN region, the island-state has attracted an impressive 51% from January to September 2019.

The government is deeply vested in ensuring that Singapore is well positioned to become Asia’s fintech hub. As such, the Monetary Authority of Singapore (MAS) announced middle of this year that it intends to issue up to five digital banking licenses by year-end.

Owning a digital bank license could broaden the breadth of financial services that fintech firms provide to customers. Two out of every three firms surveyed were keen to leverage digital banks to offer easier, faster, and more innovative solutions to ASEAN’s massive consumer base.

While funding for fintech firms based in Singapore has been evenly distributed with payments, insurance technology, and personal finance dominating, investors in Vietnam are plowing the bulk of their money in payments.

This trend is testament to the earlier and more nascent stages of fintech funding and development in Vietnam compared to Singapore, also the most mature by far among ASEAN members.

According to the report, Vietnam-based fintech companies raised $410 million, or a hefty 150 times more versus last year at $2.72 million.

Leading the way were Softbank-backed electronic payment solutions company VNPay, and Momo Pay, an e-wallet application that claims to be Vietnam’s largest mobile wallet company with 10 million active users.

These two hotspots for growth in the ASEAN fintech landscape may be at different stages of maturity in their development, but one thing is for certain: fintech firms in Singapore and Vietnam can only grow as fast as their ability to grow their people.

58% of companies surveyed agree that talent is a key inhibitor to their ability to expand in the region and scale rapidly.

President of Singapore FinTech Association (SFA) Chia Hock Lai recommends timing the market right to address the increasingly fierce war for talent in Southeast Asia. An example would be hiring local talent at least six months ahead of a new market expansion.

Happening between November 11 and 15, 2019, the SG FinTech Festival provides a thriving global platform for conversations and collaborations to happen within the fintech ecosystem. Photo credit: SG FinTech’s facebook page.