Fintech Investments in Southeast Asia Fall 20% in First Half of 2024

Fintech funding in Southeast Asia declined 20% year-on-year to US$851 million in the first half of 2024, according to a report by Tracxn, a global SaaS-based market intelligence platform. This is a major drop from the US$1.2 billion raised in the same period last year and a 31% decrease from the US$1.3 billion secured in the second half of 2023.

Southeast Asia has been one of the most resilient markets for fintech funding, but the recent decline may indicate a turning point. The second quarter of 2024 saw investments falling 85% to US$477 million compared to the same period a year earlier. The Tracxn report highlights that the highest half-yearly funding was recorded in the second half of 2021 but has since declined. 

This decline was driven by drops in seed and late-stage investments. Late-stage investments fell 47% to US$338 million in the first half of 2024 from US$632 million in the same period last year, while seed-stage investments decreased by 53% to US$42.5 million from US$90 million.

Despite the decline, early-stage funding showed some resilience, rising 17% to US$519 million in the first half of 2024 from US$443 million in the first half of 2023. 

However, the number of funding rounds decreased, with only two US$100 million+ rounds reported in the first half of 2024, compared to four in both the first and second halves of 2023. The notable rounds were ANEXT Bank’s US$148 million Series D and GuildFi’s US$140 million Series A.

Investment in tech segments displayed mixed results. The investment tech segment experienced a remarkable surge, with funding rising by 666% to US$216 million in H1 2024, compared to US$28.2 million in H1 2023. On the other hand, the alternative lending segment saw a 59% decline, raising US$206 million compared to US$502 million in the previous year. Banking tech companies raised US$186 million, a 59% increase from the US$117 million raised in H1 2023.

Despite the overall funding decline, the number of acquisitions rose, with 16 deals completed in the first half of 2024, up from 11 in the same period last year and 13 in the second half of 2023. However, no fintech companies went public during this period. Singapore led the region in fintech funding, securing US$518 million, followed by Bangkok with US$140 million and Jakarta with US$128 million.

Prominent investors continued to influence the Southeast Asian fintech landscape. East Ventures, Y Combinator, and 500 Global remained the top investors overall, while Antler, Hashed, and AppWorks dominated seed-stage investments.

MassMutual Ventures, Illuminate Financial, and Nyca Partners were the leading investors in early-stage rounds, while MUFG Innovation Partners and NewView Capital topped the late-stage investment charts. 

Despite current challenges, there is optimism for the region’s long-term growth, driven by factors such as a young population, a large consumer base, reliance on informal financial systems, and supportive government initiatives.

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