Fintech investment drops to decade low

Investment fell by over $1b in 2026.

Singapore fintech investment dropped by over a $1b as it experienced the most subdued first half the country has seen in close to a decade.

The sector drew more than $634.02m (US$499m) across 53 deals in the first half of 2026, down from roughly $1.84b (US$1.45b) across 97 deals in the same period last year, according to KPMG's Pulse of Fintech H1 2026 report published on 27 August.

After a quiet first quarter of about $111.81m (US$88m) across 26 deals, activity picked up to some $522.21m (US$411m) across 27 deals in the second quarter. That recovery rested almost entirely on a single $406.59m (US$320m) round for a cross-border payments platform in June, which alone accounted for close to two-thirds of Singapore's total fintech investment for the half.

Anton Ruddenklau, partner and head of financial services at KPMG in Singapore, said the headline number tells only part of the story.

"What we are seeing in Singapore mirrors the global market — investors are being far more selective, consolidating capital behind a small number of scaled, high-conviction platforms rather than funding behaviour we saw in prior years," Ruddenklau,said. "A single deal carrying most of the half is a signal of that concentration."

Ruddenklau said the fundamentals that make Singapore a strategic hub for fintech remain intact, citing a trusted regulatory environment, deep cross-border connectivity and strength in payments and digital assets, and described these as the areas where capital is still flowing.

Investment clustered around three verticals: payments, digital assets and cryptocurrency, and artificial intelligence and machine learning. Most went to earlier-stage companies building tokenisation, digital-asset and AI-enabled infrastructure, which KPMG said points to a market still forming at the foundations even as growth-stage funding thins.

Globally, the picture ran in the opposite direction on value. Fintech investment across venture capital, private equity and mergers and acquisitions rose from $91.74b in the second half of 2025 to $131b in the first half of 2026, putting the sector on pace for its strongest annual performance in four years.

Deal volume stayed soft at 2,100 globally against 2,500 in the previous half, as investors concentrated capital on large transactions involving mature fintechs with well-proven business models.

Cross-border payments was one of Singapore's anchor verticals, though largely on the strength of the June deal.

That single transaction accounted for nearly all of the $421.84m recorded across the three payments deals in the half. Two of the three were later stage, which KPMG said reflects sustained investor appetite for scaled platforms that can move money across borders while managing compliance, currency conversion and settlement.

Digital assets and cryptocurrency again accounted for the largest share of Singapore's deal count, though individual cheque sizes were relatively modest. Larger, later-stage names were built around regulated market infrastructure, including digital-asset services providers and crypto payments firms, whilst the seed and early-stage group skewed towards exchange, brokerage and cross-chain tooling platforms.

With 15 of the 27 deals at seed and early stage rather than in large growth rounds, KPMG said this signals continued confidence in Singapore as a base for regulated, institutional-grade digital-asset businesses, even as the sector's weight rests on young companies rather than proven, scaled platforms.

Artificial intelligence and machine learning was the most active vertical of the half, featuring in 18 of the 53 deals and $464.91m of disclosed value, split equally across early and late stage.

Later-stage deals clustered around applied software that embeds AI into established financial workflows, spanning cross-border payments, investment research, insurance and claims, credit-risk modelling and document processing.

KPMG described these as revenue-generating platforms using AI to improve productivity and margins rather than to build entirely new markets, and said investors are willing to pay up for proven models where AI deepens an existing commercial edge.

At seed and early stage, the profile shifts towards agentic software and infrastructure, including agentic execution platforms, agentic networks and cross-chain automation, alongside broader AI and crypto tooling.

KPMG said this could signal investors expect autonomous, AI-driven agents to become core infrastructure for how money moves and how financial decisions are executed.

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