Fintech funding in Southeast Asia significantly declined in the first half of 2024, making it the least funded half-year in the past three years, reveals a Tracxn report.
The highest half-yearly funding was recorded in H2 2021, after which it significantly dropped, thanks mainly to the current macroeconomic conditions and geopolitical issues.
According to Tracxn’s Geo Semi-Annual Report: SEA FinTech H1 2024, fintech companies in Southeast Asia secured a total of US$899 million in H1 2024, which is 25 per cent lower than the US$1.2 billion raised in H1 2023 and 31 per cent lower than the US$1.3 billion in H2 2023.
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This downward move was driven by declines in seed and late-stage investments.
Late-stage investments fell 47 per cent to US$338 million in H1 2024 from US$632 million in H1 2023. Seed-stage investments stood at US$42.5 million in H1 2024, a 53 per cent decrease from US$90 million in H1 2023.
However, early-stage funding rose 17 per cent to US$519 million in H1 2024 from US$443 million in H1 2023.
Only two US$100 million+ rounds were reported in H1 2024, as against four each in H1 2023 and H2 2023: ANEXT Bank’s US$148 million Series D round and GuildFi’s US$140 million Series A round.
Investment tech, alternative lending, and banking tech are the top-performing segments based on funding in the H1 2024 fintech sector.
The investment tech segment secured US$216 million in H1 2024, an increase of 666 per cent compared with the US$28.2 million in the first six months of 2023.
The alternative lending segment raised US$206 million in H1 2024, a drop of 59 per cent compared with US$502 million raised in H1 2023.
Banking tech companies raised US$186 million in H1 2024, a growth of 59 per cent from the US$117 million raised in H1 2023.
No fintech companies went public in the first six months of 2024. However, the number of acquisitions increased– to 16 in H1 2024 from 11 in H1 2023 and 13 in H2 2023.
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Singapore dominated the fintech funding scene, accounting for more than half of the total investments. Fintech companies in the city-state raised US$518 million in H1 2024, while those based in Bangkok and Jakarta raised US$140 million and US$128 million, respectively.
East Ventures, Y Combinator, and 500 Global are the all-time top investors in this space. Antler, Hashed, and AppWorks were the top investors in seed-stage rounds in H1 2024, while MassMutual Ventures, Illuminate Financial, and Nyca Partners were the top early-stage investors. MUFG Innovation Partners and NewView Capital were the top investors in late-stage rounds during the period.
Despite certain challenges, significant optimism exists for this region’s long-term growth. Factors such as the young population, large consumer base, reliance on informal financial and commercial systems, and government initiatives are expected to accelerate growth in this region.
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