close
Share with your friends

Southeast Asia becomes hotspot for fintech activity in H1 2020, finds KPMG Pulse of Fintech

Southeast Asia becomes hotspot for fintech...

China tech groups to accelerate focus in South east Asia, Hong Kong accelerates digitization

1000

Related content

According to KPMG’s latest Pulse of Fintech H1 2020 report, Asia Pacific saw USD 8.1 billion in total fintech investment in the first half of the year, with Southeast Asia notching the top two deals, namely the USD 3 billion funding round by Indonesia-based platform provider Gojek and an USD 886 million raise by its Singapore-based competitor Grab.

Fintech investment in the region was quite diverse from a regional perspective, with India (Navi Technologies: USD 398 million, Pine Labs: USD 300 million, PaySense: USD 185 million), Japan (Paidy: USD 251 million), South Korea (KSNET: USD 237 million), Australia (Airwallex: USD 160 million, Judo Bank: USD 147 million) and Indonesia (Moka: USD 130 million) all recording large fintech deals.

Southeast Asia saw strong fintech investment activity in the first half of 2020, as the largest fintech firms in Asia continued to gain ground, while smaller firms struggled in terms of profitability and attracting new investments. China technology groups meanwhile are expected to accelerate their focus in Southeast Asia moving forward, according to KPMG’s latest analysis.

While fintech investment activities in mainland China continued to decline, from USD 323 million across 37 deals in the first quarter to USD 285 million across 28 deals in the second quarter of 2020, the report notes this partly reflects the maturity of China’s fintech market, which is dominated by a smaller number of large players. Two of China’s mega-giants, Alibaba and JD.com held secondary listings in Hong Kong SAR in the first half of 2020, raising USD 11 billion and USD 3.9 billion respectively. The planned October dual listing of Ant Group in Hong Kong and Shanghai is expected to become the world’s largest IPO.

Andrew Huang, Partner and Fintech Leader, KPMG China, said: “China’s economy has recovered a lot from COVID-19, although it is still a tenuous situation. Many fintech businesses have been negatively impacted. This is challenging for some of the smaller fintechs due to the need for extra funding to manage cash flow – funding that is difficult to obtain.”

The report notes accelerated development of a digital renminbi in mainland China. In May 2020, a trial of the e-RMB was initiated in four cities, including Shenzhen, Suzhou, Chengdu, as well as a new area south of Beijing, Xiong’an. Chinese officials have also proposed the creation of a pan-Asian ‘stablecoin’ to improve cross border trade in the East Asia region.

Hong Kong SAR meanwhile introduced an ‘opt-in’ licensing program for Digital Asset Exchange, as well as made strides in the digitalisation of the ESG space, among other areas.

Barnaby Robson, Partner, Deal Advisory, KPMG China, commented: “We have seen ESG investment appetite grow in the US and Europe, and that trend is coming to Asia. A fintech ecosystem will emerge to meet the growing demand for robust ESG data, harnessing new technologies such as IoT, Big Data, AI and blockchain. Hong Kong is well-positioned to be a regional hub for this emerging industry, given its regional lead in securities trading.”

 

-ENDS-

About KPMG China

KPMG member firms and its affiliates operating in mainland China, Hong Kong and Macau are collectively referred to as “KPMG China”. KPMG China is based in 26 offices across 24 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Jinan, Nanjing, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR.  Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 147 countries and territories and have more than 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multidisciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.

Media enquiries:

Nina Mehra
KPMG
Direct: +852 2140 2824
Email: nina.mehra@kpmg.com

Isaac Yau / Isabel Kwok
Citigate Dewe Rogerson
Direct: +852 3103 0112/+852 3103 0123
Email: KPMG@citigatedewerogerson.com

© 2020 KPMG Huazhen LLP — a People's Republic of China partnership, KPMG Advisory (China) Limited — a wholly foreign owned enterprise in China, and KPMG — a Hong Kong partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Connect with us