Australia off to a solid start with almost $900 million in fintech investment

Total investment activity (VC, PE and M&A) in fintech in Australia 2018–2021*

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

Australia saw a solid start to the year, with $890 million in fintech investment in H1’21, including National Australia Bank’s $170 million acquisition of digital bank 86 400 and $100 million raises by payments firm Airwallex and green energy focused POS credit and sales provider Brighte.

In addition to open banking, digital banking, payments, and B2B services, Australia saw rising interest in the digital mortgage space; in H1’21, Athena Home Loans raised $90 million.

Interest in banking-as-a-service solutions continued to grow in Australia. In H1’21, incumbent bank Westpac kept moving forward with its development of a BaaS model in partnership with UK-based fintech 10x, announcing a partnership with ID-focused regtech FrankieOne to facilitate seamless onboarding.1

Several of Australia’s big banks have focused on investing in ecosystem and vertical players in order to simplify and enhance the experience of SMEs and merchants; during H1’21, Commonwealth Bank invested $20 million in Amber Energy as part of a partnership to provide access to wholesale energy process to its customers.2

There’s a lot happening in the fintech sector in Australia — between payments, digital banking, and banking-as-a-service solutions. Corporates were very active in H1’21, focusing on building out their capabilities and their offerings in order to provide a broader range of solutions to their clients, particularly SMEs and merchants.

Ian Pollari

Global Co-Leader of Fintech,Partner and National Banking Leader,KPMG Australia


China attracts $1.3 billion in fintech investment in best result since H2’19

Total fintech investment activity (VC, PE and M&A) in mainland China 2018–2021*

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

Fintech investment in China increased from $900 million in H2’20 to over $1.3 billion in H1’21.

China did not see any mega VC deals in H1’21, however, the $100 million+ VC deals that occurred highlight the growing diversity of fintech startups attracting funding. In H1’21, medical payments company MediTrust Health raised $155 million, wealthtech WeBull raised $150 million, asset data management firm Xuncetech raised $108 million, and B2B solutions provider XforcePlus raised $100 million.

While tightening controls over crypto, China also expanded its central bank digital currency pilot project in H1’21 to include some salary payments in the Xiong’an New Area,1 subway fare payments in Beijing,2 and exchanges between digital and physical currencies at two Beijing-based banks.3

In H1’21, financial regulators in China ordered a number of platform companies with financial services offerings to enhance their regulatory compliance.4

China’s fintech market is incredibly mature next to many other jurisdictions, with investments in areas like payments really taking off a few years ago and a number of clear leaders emerging. Now what we’re seeing isn’t megadeals in those very mature areas, but rather an increasing number of smaller deals focused on less mature sectors of fintech — like B2B services, wealthtech, and insuretech..

Andrew Huang

Patner and Fintech Leader,KPMG China

Hong Kong (SAR, China) set to adjust virtual asset exchange licensing rules

The introduction of digital bank licenses has caused some of the more established banks in Hong Kong (SAR, China) to up their game in terms of the user interface that they offer and the value propositions and how they go to market.

Cryptocurrencies and crypto exchanges continued to attract attention in Hong Kong (SAR, China), with raises by Amber Group ($100 million) and Babel Finance ($40 million) in H1’21. Hong Kong (SAR, China) has also seen increasing interest in the entire blockchain ecosystem from VC funds and family offices.

While licensing of crypto exchanges is currently ‘opt-in’ based, during H1’21, the Hong Kong Financial Services and the Treasury Bureau found that all virtual asset exchanges should be licensed with services restricted to professional investors. Regulations to enact these rules are expected over the next year. This could affect crypto investments over the medium term and also Hong Kong’s (SAR, China) status as a center for blockchain in Asia5

Hong Kong (SAR, China) has become a center and talent pool for blockchain and crypto in Asia. It’s an incredibly hot space for investment – and I expect to see significant M&A activity as CeFi players look to acquisitions to expand capabilities, and investors seek to tap into one of the most exciting and fastest growing asset classes.

Barnaby Robson

Partner, Deal Advisory,KPMG China


Big start to 2021 as India attracts over $2 billion in fintech investment

Total fintech investment activity (VC, PE and M&A) in India 2018–2021*

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

India almost matched its total fintech investment in 2020, with $2 billion in investment in H1’21, including merchant platform Pine Labs’ $285 million PE funding round, and $100 million+ VC funding rounds by Cred ($215 million), RazorPay ($160 million), KreditBee ($153 million), OfBusiness ($110 million), and BharatPe ($108 million).

Digital banking was a big play in India, but with a unique model compared to other jurisdictions in the regions — with digital banks acting primarily as SaaS providers and regulatory responsibility remaining with bank partners.

Early fintech leaders in India have continued to expand their business models into adjacencies in order to bring their customers more value, such as payments players acquiring insurtechs.

Insurtech is a growing area of interest for investors in India; in H1’21, several insurtechs raised mid-sized VC or PE funding rounds, including Turtlemint ($46 million), RenewBuy ($45 million), and Digit Insurance ($18 million).

Exits in India are going to increase, both in terms of IPOs and in terms of acquisitions. On the M&A front, fintechs could be targeted by banks, larger fintechs, or even a fintech services conglomerate. Over the next twelve months, we expect leading fintech unicorns trying to tap into the strong capital market by looking at an IPO. Banks are also keen to partner with Fintechs especially Neo Banks and Wealthtech platforms.

Sanjay Doshi

Partner and Head of Financial Services,KPMG in India


Grab announces $40 billion SPAC merger in Singapore

Total fintech investment activity (VC, PE and M&A) in Singapore 2018–2021*

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

Fintech investment dropped somewhat in Singapore, from $930 million in H2’20 to $614 million in H1’21; eWallet company Matchmove raised $100 million in Singapore’s largest deal of the quarter.

During H1’21, platform giant Grab announcing a $40 billion SPAC merger — setting the stage for a big end to the year.

The four digital banks that received licenses in Singapore were quiet in H1’21, focusing on building out their operations and products; Singapore’s incumbent banks also focused significantly on their digital products and value propositions.

During H1’21, the Green Finance Industry Taskforce of the Monetary Authority of Singapore announced a number of initiatives focused on accelerating green finance, including issuing a guide for climate-related disclosures, a framework for green trade finance, and recommendations and a roadmap to scale green finance in a number of key sectors.1

It is all about platforms here in South East Asia targeting inclusion, sustainability,  e-commerce and efficient access to finance. Through this we are seeing the beginning of a redrawing of Financial Services, supported by the opening up of data by regulators, central banks and the cloud providers.

Anton Ruddenklau

Global Co-Leader of Fintech KPMG