Southeast Asia’s (SEA) fintech sector faced a significant funding downturn in 2024, with total investments falling to US$1.6 billion, a 23 per cent decrease from the US$2.1 billion recorded in 2023, as per a report by data intelligence platform Tracxn.

This represents a substantial 75 per cent drop from the US$6.3 billion in 2022, effectively returning funding to pre-pandemic levels.

The decline is attributed to macroeconomic headwinds, rising interest rates and geopolitical tensions.

Also Read: 2024 fintech highlights: The startups dominating Southeast Asia’s financial landscape

Despite the overall decrease, the sector has demonstrated resilience and remains one of the top-performing areas in the SEA tech startup landscape.

As per the Tracxn Geo Annual Report: SEA FinTech 2024, the funding decrease was widespread, affecting all investment stages. Late-stage funding experienced the most severe impact, declining by 31 per cent to US$694 million. Early-stage funding also saw a decrease of 16 per cent to US$750 million. Seed-stage funding experienced a smaller drop of 6.4 per cent, reaching US$190 million.

However, certain segments within the sector demonstrated robust growth. The payments segment saw a remarkable 53 per cent increase, raising US$366 million in 2024.

Similarly, the cryptocurrency space attracted US$325 million, a 20 per cent rise from the previous year. Banking tech companies also experienced a significant 63 per cent surge in funding, securing US$265 million.

Ascend Money’s US$195 million Series D round was the largest deal in the SEA fintech landscape. Other notable deals included ANEXT Bank’s US$148 million Series D round and bolttech’s US$100 million Series C round.

Polyhedra Network was the sole new Unicorn in the region in 2024, achieving a US$1 billion valuation after raising US$20 million in a Series B funding round.

The fintech ecosystem saw 27 acquisitions, a slight uptick from 26 in 2023, with NTT Data’s acquisition of GHL for US$154 million being the largest.

However, there were no fintech IPOs in 2024, compared to one in 2023.

Singapore led the funding activity with US$955 million raised by fintech companies based there. Jakarta and Bangkok followed with US$242 million and US$198 million, respectively.

Also Read: SEA startup funding sees mixed results in December 2024

The most active investors include East Ventures, Y Combinator, and 500 Global.

Despite challenges like declining demand, valuation concerns, and geopolitical risks, the long-term outlook for the region’s fintech ecosystem remains optimistic. A young, tech-savvy population, a large consumer base, reliance on informal financial systems, and government initiatives to enhance financial inclusion provide a strong foundation for future growth. The sector’s resilience and innovation, particularly in payments and cryptocurrencies, signal its enduring potential.

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Mirxes, an RNA technology firm headquartered in Singapore, has raised US$40 million in structured financing from R-Bridge Healthcare Fund, which is owned by CBC Group, according to reports.

The funding will fuel global expansion, primarily in high-growth Asian markets, including Southeast Asia, China, and Japan.

Also Read: ‘We aim to make early cancer detection accessible on a global scale’: Mirxes CEO

The latest injection comes about a year and a half after Mirxes secured US$50 million from existing and new investors, Beijing Fupu, EDBI, Mitsui & Co., NHH Venture Fund, and the Agency for Science, Technology and Research.

Established in June 2014 as a spin-off from A*STAR, Mirxes was conceptualised and developed by co-founders Dr Zhou Lihan, Prof. Too Heng-Phon, and Dr Zou Ruiyang.

The company makes early cancer detection solutions accessible globally. Its flagship initiative, Project CADENCE (Cancer Detected Early caN be CurEd), leverages its RNA technology platform, deep expertise in PCR diagnostics, and population-scale next-generation sequencing (NGS) capabilities to create a blood-based multi-cancer early detection test to alleviate cancer burden, save lives and reduce healthcare costs.

Last June, its fully-owned subsidiary, Mirxes Japan, secured a grant of up to 20 million yen (US$127,000) from the Japan External Trade Organization (JETRO). The grant will support the development and validation of a new non-invasive cancer biomarker screening test service specifically for the Japanese market.

Also Read: Harnessing the power of AI to help improve gastric cancer detection

Previously, Mirxes raised US$77 million in a Series C financing round led by CR-CP Life Science Fund and joined by global healthcare investment firm Rock Springs Capital, Charoen Pokphand Group (Thailand) and EDBI.

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NYSE-listed Southeast Asian proptech group PropertyGuru has announced that its current CEO, Hari V. Krishnan will step down to pursue other interests.

He has been replaced by Lewis Ng, who previously served at PropertyGuru for six years (2014-2019) as Managing Director of Singapore and Chief Business Officer.

Ng will assume the role of CEO in March 2025.

Krishnan, who played a key role in transforming PropertyGuru from a startup to a market leader in Southeast Asia, will continue to be involved with the company as Senior Advisor to the Board.

The new CEO Ng has experience in leadership positions at global brands such as Apple and TripAdvisor and Southeast Asian unicorn Carousell. He most recently served as Chief Operating Officer at SEEK Asia.

Also Read: EQT completes PropertyGuru acquisition

PropertyGuru also announced the appointment of Trevor Mather as the Chairman of the Board of Directors. Mather has experience scaling marketplace businesses, previously serving as CEO of Auto Trader. He is currently Chairman of Baltic Classifieds Group.

The Board of Directors includes Janice Leow, Partner in the EQT Private Capital Asia advisory team and Head of EQT Private Capital Southeast Asia, and Ed Williams, founder and ex-CEO of Rightmove, Chairman of Trade Me and former Chairman of Auto Trader.

Founded in 2007 and headquartered in Singapore, PropertyGuru is one of the notable proptech platforms in Southeast Asia (SEA). The company said that it connects over 31 million property seekers with more than 50,000 agents across Singapore, Malaysia, Thailand and Vietnam each month.

Its services included extensive real estate listings, data-driven insights, and mortgage solutions such as PropertyGuru Finance and enterprise client solutions under PropertyGuru for Business.

Last year, the group was acquired by BPEA Private Equity Fund VIII Limited (EQT Private Capital Asia) for US$1.1 billion in an all-cash transaction.

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Indonesian capsule hotel and cabin operator Bobobox announced that achieved a remarkable 200 per cent ARR growth for Bobocabin Sukawana and positive EBITDA in 2024.

A key driver of Bobobox’s expansion has been its ability to forge partnerships across both public and private sectors. Most recently, Bobobox partnered with Bank Mandiri, one of Indonesia’s leading financial institutions, to explore fresh investment opportunities within the accommodation sector.

“Our partnership with Bank Mandiri is key to supporting Bobobox’s growth and opening new investment opportunities,” says Indra Gunawan, Co-Founder and CEO of Bobobox, in an email interview with e27. “Bank Mandiri connects us to a wide network of potential investors, strengthening our ability to secure necessary partnerships for expansion and innovation.”

Gunawan highlighted that this collaboration extends beyond financial support, offering valuable expertise to navigate the complexities of the hospitality and real estate markets. “Their support gives us a competitive edge, ensuring we make informed decisions and pursue opportunities with confidence.”

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In this interview, the CEO explains the company’s expansion plan in detail, complete with insights about travellers in Indonesia. The following is an edited excerpt of the conversation:

With 37 locations in your portfolio, including the five new properties, how has the response been from customers in these new destinations, and what insights have you gained from these expansions?

Our expansions over the past year have been met with positive feedback from customers. Bobocabin Sukawana, as the first location to feature our latest cabin design, has achieved remarkable results, further solidifying the appeal and success of our offerings.

Through this, we have observed a noticeable shift in the travel landscape. Guests are no longer just seeking destinations but are looking for unique, immersive experiences in nature. They seek meaningful activities that connect them with nature, local cuisines, and traditions and move beyond typical tourist attractions to find more authenticity.

Sustainable travel is also becoming increasingly popular due to growing environmental awareness. Guests are increasingly looking for eco-friendly accommodations and experiences that support local ecosystems and communities.

The performance at Sukawana highlights the strong product-market fit between our cabin design and evolving customer expectations. Guests have appreciated the seamless integration of modern amenities with a nature-based experience, where tech enhances comfort without compromising their connection to the surrounding environment.

This success creates a clear roadmap for us to scale the concept to other locations.

Also Read: How Radiant1 helps hotels optimise room rate pricing in real time, maximise revenue

Bobobox achieved a remarkable 200 per cent ARR growth for Bobocabin Sukawana and positive EBITDA in 2024. What were the key strategies or operational changes that contributed to this milestone?

It resulted from strategic initiatives and operational excellence rooted in our commitment to customer-centric innovation and sustainable growth. It culminates our efforts across product innovation, operational excellence, and customer engagement.

In product innovation, the introduction of Cabin 3.0, a new cabin design, helped us reach new market segments while strengthening our appeal to repeat customers. Additionally, our strategic expansion into high-demand locations contributed to a consistent flow of bookings.

To achieve operational efficiency and cost management, we optimised operations by strategically managing our CAPEX through partnerships with public and private sector entities via our Joint Venture (JV) collaboration. We also maintained strict budgetary control and leveraged technology to manage resources effectively. These measures enabled us to ensure growth that was both scalable and cost-efficient, contributing to a positive EBITDA.

Our customer-centric approach, focused on understanding our guests’ needs, helped us create exceptional experiences for them. By continuously improving our digital ecosystem, such as our mobile app, self-service kiosks, and smart IoT solutions, we improved both operational efficiency and customer satisfaction.

With plans to expand to 12 new locations by 2025, what criteria does Bobobox use to select key destinations such as Surabaya, Medan, Bali, and Mt. Bromo, and what challenges do you anticipate during this expansion?

We start by focusing on market potential. For example, Surabaya and Medan are growing urban centres with increasing demand for innovative accommodations, while Bali and Mt. Bromo attract nature and adventure tourism.

Also Read: Aiello banks US$5.8M to take its voice AI assistant for hotels beyond Taiwan

Accessibility and infrastructure are also key factors. We consider transport links, proximity to transit hubs, and nearby attractions to ensure our locations are appealing and convenient for travellers.

Destinations that promote sustainability, culture, and a connection to nature fit perfectly with Bobobox’s vision. Bali, with its eco-conscious travellers, and Mt. Bromo, with its breathtaking natural landscapes, are prime examples of locations that match our philosophy.

We understand that expansion comes with challenges. Developing new locations requires significant investments in construction, design, and technology. It is crucial to maintain high standards while managing costs. We must also adapt to changing travel trends influenced by the global economy, as economic uncertainty can affect traveller behaviour.

Despite these challenges, our experience, strong operations, and dedication to exceptional guest experiences give us the confidence to drive expansion and establish new standards in every location.

What emerging hospitality trends do you see shaping the industry, and how is Bobobox adapting to these trends to stay ahead of the competition?

As travellers increasingly seek affordable, high-quality accommodations, Bobobox’s capsule hotels meet this demand by optimising space efficiency while maintaining comfort and privacy. This balance allows us to provide an exceptional experience for budget-conscious travellers.

Also Read: Future-proofing hotels to stay ahead of the curve

The rise of tech-savvy travellers has also transformed the hospitality landscape, with guests expecting seamless digital experiences. Bobobox embraces this change by integrating smart tech such as automated check-ins, smart lighting, and keyless access. These innovations enhance convenience and ensure a smooth stay, from booking to checkout.

The growing trend of business and leisure travel, especially among remote workers, has created a need for accommodations supporting work and relaxation. Our capsule hotels cater to this demand by offering comfortable workspaces, reliable high-speed Wi-Fi, and a quiet environment that allows guests to stay productive while enjoying downtime.

Sustainability is a key priority for modern travellers, particularly younger generations who value eco-friendly options.

With the hospitality sector increasingly focused on sustainability, what steps is Bobobox taking to incorporate eco-friendly practices into its operations and designs while maintaining affordability and quality?

We approach sustainability from the design process by eliminating plastic key cards, which are common in the hospitality industry, and replacing them with QR codes in the Bobobox app. This change reduces plastic waste, cuts operational costs, and enhances the guest experience.

We continuously iterate our products, focusing on sourcing and design to improve sustainability. Each iteration prioritises sustainability, waste reduction, and accessibility for people with disabilities. Last year, we removed all deforestation-related products from our material sources.

This year, we will launch the 4th iteration of our Bobocabin product (Bobocabin V3.1), which will be the first cabin made from recycled materials. In this version, we have eliminated all virgin plastic and wood, with almost 85 per cent of the materials crafted from recycled waste.

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Image Credit: Bobobox

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If the recent prevalence of Artificial Intelligence (AI) and Machine Learning (ML) shook up the fintech industry like an earthquake, compliance is the tsunami after. AI and ML are driving transformative changes across the fintech industry, with adoption rates continuing to rise. Despite a global decline, according to The KPMG Pulse of Fintech H2’23 report, AI fintech funding in Singapore skyrocketed to an impressive US$333.13 million in H2’23, as compared to the US$148.08 million recorded in H1’23.

The Asia Pacific region (APAC) is home to one of the fastest-growing fintech industries in the world and serves as the headquarters of numerous global and regional leaders. Over recent years, the fintech industry in APAC has experienced rapid evolution, driven by technological advancements and shifting consumer expectations for instant payments and digital access to financial services.

The region is on track to surpass the United States to become the world’s top fintech market by 2030, with a projected CAGR of 27 per cent. Amid this growth, AI has emerged as a key driver in fintech, transforming traditional fintech services with new capabilities for enhanced customer experience, automated services and predictive analytics. As fintech companies push the boundaries of innovation, it is crucial to ensure that regulatory frameworks evolve to keep pace with these advancements and address potential risks. 

Navigating the risks of AI in fintech

Despite promising advancements, the rise of AI in fintech introduces several critical risks that must be carefully managed. As AI becomes more embedded in financial services, it presents unique challenges that extend beyond traditional regulatory concerns.

Also Read: Five SaaS fundraising mistakes and how to avoid them

The increasing digitisation of APAC countries further heightens these risks, as the expansion of digital platforms and services lead to greater accessibility to malicious tools for digital fraud. AI-powered fraud, in particular, is becoming a significant threat, requiring vigilant oversight and adaptive regulatory frameworks to protect consumers and maintain trust in the financial system.

Deepfake technology, where Generative AI replicates a person’s likeness using videos, images and audio, saw a tenfold increase in deepfake cases from 2022 to 2023, posing significant challenges for identity verification and fraud prevention, especially in the financial sector.

Consequently, there is a stronger focus on security measures for fintech innovations being tested in regulatory sandboxes, including stricter consumer protection requirements and more rigorous compliance standards. Moreover, the rapid advancement of deepfake technology often outpaces regulatory updates, creating a “cat-and-mouse game” between innovation and oversight.

At the same time, AI systems often rely on vast amounts of sensitive data, making it crucial for data to be securely managed and protected from breaches. Misuse of personal financial information can have severe consequences for consumers and undermine trust in the fintech sector.

AI-powered solutions can enhance data security through multi-layered protection at different stages of the user journey. However, these tools require access to extensive datasets, which must be managed in compliance with data privacy regulations to prevent misuse and maintain consumer trust.

Shaping the future of AI-driven fintech through regulatory sandboxes

In 2020, there were approximately 73 sandboxes in 57 jurisdictions; By 2023, the number of sandboxes in Southeast Asia increased significantly, reflecting the region’s growing focus on fostering fintech innovation. Countries like Singapore, Australia, and Hong Kong, China are leading the way with regulatory sandboxes designed to support and oversee AI-driven innovations in fintech.

In Singapore, the Monetary Authority of Singapore (MAS) launched its first Fintech Regulatory Sandbox in 2016, which was later enhanced with the introduction of Sandbox Express in 2019 and Sandbox Plus in 2022, which allows fintech companies to test their solutions, including AI-driven technologies, with regulatory flexibility.

Similarly, the Australian Securities and Investments Commission (ASIC) Innovation Hub and Hong Kong Monetary Authority (HKMA) launched its Fintech Supervisory Sandbox (FSS) in 2016, which offers sandboxes where new financial technologies, including AI, can be tested under regulatory oversight. These sandboxes enable financial services innovators to experiment with new products and services with reduced regulatory constraints, offering greater flexibility and potential exemptions from existing rules.

Making AI in fintech a more level playing ground

Given the global nature of fintech, cross-border compliance is crucial for tackling AI security challenges. With APAC’s diverse digital landscape, countries are at varying stages of technological advancement, leading to significant differences in AI regulations across the region.

While countries like Singapore, Australia, and Hong Kong, are at the forefront of AI-driven fintech innovations, others like Indonesia and Malaysia are increasingly catching up. Indonesia is still in the early stages of developing a comprehensive regulatory framework for AI in fintech, with progress impeded by limited infrastructure and investment in AI research and development.

So far, the Indonesian government has issued ethical guidelines for AI use, such as the Ministry of Communication and Informatics’ Circular Letter No. 9 of 2023 on AI Ethical Guidelines and the Financial Services Authority’s (OJK) Ethical Guidelines on Responsible and Trustworthy AI in the Financial Technology Industry.

For Malaysia, the country has made significant strides in establishing regulatory sandboxes that support AI innovations. Specifically, the Malaysian Research Accelerator for Technology & Innovation (MRANTI), in collaboration with NVIDIA, launched an AI Sandbox Programme in April 2024. This initiative is part of the National Technology Innovation Sandbox (NTIS), which supports various sectors, including AI, to foster innovation and entrepreneurship in Malaysia.

Also Read: AI and healthcare: Navigating challenges and embracing the future

There is a need for more proactive policies and collaboration between regulators and the fintech industry to create a conducive environment for AI innovations. Despite these disparities, the frameworks established by leading nations in APAC offer valuable lessons and models for others to follow.

Singapore is effectively leading the region’s digital transformation by strategically positioning themself within international forums to shape global AI standards, ensuring that the region’s regulations are aligned with best practices.  This leadership provides a clearer direction for other countries in the region to expedite their AI development.

Balance is key to the sustainable fintech future

Navigating the balance between innovation and compliance is a pivotal challenge for fintech regulatory sandbox participants in Southeast Asia. As AI continues to transform the financial sector, regulatory frameworks must adapt to emerging risks while still encouraging innovation. To enable fintech companies to operate securely on a global scale, the region’s regulatory environment must emphasise data privacy, cybersecurity, and cross-border compliance.

The escalating threat of deepfake technology and other advanced fraud techniques calls for continuous vigilance and adaptation within regulatory sandboxes. In response, businesses should adhere to regulatory frameworks to safeguard their consumers and systems from malicious actors. Implementing robust identity verification and anti-fraud measures is essential to prevent financial fraud.

By embedding comprehensive compliance measures from the beginning, fintech innovators can effectively manage regulatory complexities while driving forward with new ideas. Striking this balance will not only safeguard consumers but also bolster the credibility and long-term viability of the fintech industry in the region. 

Disclaimer: The content provided in this article is for general informational purposes only. It does not constitute legal advice or financial guidance. While the author strives for accuracy and reliability, it is recommended that you consult with a qualified legal or financial professional to address your specific situation. The author disclaims any liability arising from actions taken based on the content published herein.

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