Australia Is Home to At Least 733 Active Fintech Firms, Up from 629 in September 2019: Report

Australia is currently home to at least 733 active Fintech firms, up considerably from 629 back in September 2019, according to the KPMG Fintech Landscape 2020 map. This represents an increase of 104 firms that joined the nation’s financial technology industry between September 2019 and December 2020.

The infographic provides a snapshot of Australia’s Fintech sector, which reveals several key trends that have become prominent during the past year.

For instance, the blockchain and crypto space experienced the most growth with 49 new Fintechs being launched to focus on these initiatives. It’s followed by Fintechs specializing in lending services which saw 26 new firms being added (some businesses reclassified from the payments sector since KPMG’s Fintech Landscape 2019 map). The Australian Insurtech sector saw 24 new firms being added to the list.

Fintech segments that saw companies suspend operations or leave the sector in 2020 include those offering services related to crowdfunding, data and analytics, Regtech, and Wealthtech.

Daniel Teper, national Fintech lead at KPMG Australia, noted that the financial technology sector in Australia continued to grow steadily last year with several new firms making changes to their business models to cope with changes following the COVID-19 outbreak.

Some Fintech sectors saw consolidation or changes to their business strategies, a trend that will continue as the industry continues to mature, Teper noted.

The maturing of Australian Fintech sector is evident when we consider the growing number of post-revenue businesses. The 2020 EY Fintech Australia Census, published in October of last year, reveals that out of over 100 domestic Fintechs surveyed, around 78% reported that they were post-revenue and 98% had been in the market for at least 2 years.

The study confirmed that Australia-based Fintechs recorded steady growth in paying clients, with nearly 40% of local Fintech businesses surveyed now reporting over 500 paying clients, up considerably from only 27% back in 2019.

The EY survey further revealed that Australia-headquartered Fintech firms have been entering new markets including Ireland (22%), Germany (17%), Indonesia (17%) and the United Arab Emirates (17%). Australia-based Fintech firms noted that the US (56%), New Zealand (54%) and the US (50%) were the three main markets for expanding their operations in other jurisdictions.

Total investment in Australia’s Fintech industry reached $376.5 million during the first half of  2020 with the greatest amount of funding acquired by banking challenger Judo Bank and international payments firm Airwallex.

Judo Bank, which offers digital banking services to SMEs, finalized a AUD 284 million Series D investment round in December of last year. The company reached a valuation of approximately AUD 1.6 billion following the round.

Airwallex, which was first established in Australia but has now moved its head offices to Hong Kong, secured AUD 307 million via its Series D round in 2020

Last year also saw some Fintechs leave the industry such as non-bank lending platform Plenti Group, which had conducted an IPO in September 2020.

As covered recently, Big Four auditing firm KPMG in Australia has released a report, titled, The 30 Voices, which aims to cover “every facet” of financial services and beyond. It features insights related to developments from incumbents to banking challengers, Big Tech firms to investors, legislators to academics.

According to KPMG’s report, when taken together, these ecosystem participants “create a valuable chorus of insight and expertise.”

While commenting on how the COVID-19 outbreak is beginning to transform the future for financial services, the report notes that the financial services landscape could look “fundamentally different” by 2030.

The report added that digital transformation along with changing customer expectations and the new entrants have “long been disruptive forces in the financial services landscape.” But the Coronavirus crisis has really accelerated the pace of digital technology adoption and the development of the digital economy.

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