A multitude of factors, including the ongoing U.S.-China trade war, have hammered Asia Pacific's fintech sector with just $3.6 billion raised in the first half of 2019.
Assuming the second half will match the first—U.S. President Donald Trump just slapped a «small» 10 percent tariff on $300 billion worth of Chinese goods—the sector will close at just above $7 billion, a 72-percent plunge compared to 2018’s $25.5 billion, according to a KPMG report, titled «Pulse of Fintech» report.
The consultant attributed the Asia Pacific drop to the lack of blockbuster deals that were seen in China last year to saturation in the payments market, regulatory scrutiny and the ongoing U.S.-China trade war.
Still a big pond
Despite the slowdown in Asia, the creation and expansion of the financial technology universe have just begun and KPMG foresees growth in several facets, in addition to virtual banking in Hong Kong, Singapore and China.
In light of stricter rules in mainland China, growth opportunities could be found in regulatory technology. More fintech could list in Australia in the coming months. Blockchain is also expected to lure investments into applications in micro-financing, cloud computing and others.
In terms of deal types, the report highlights that the early signs of a slowdown may be real with a drop in early-stage deals such as seed investments compared to late-stage deals.
