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.
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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.
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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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