Asean fintech funding hits record high of US$3.5b for 9M 2021: report
FUNDING for financial technology (fintech) startups in Asean more than trebled to hit a record US$3.5 billion in the 9-month period in 2021 compared to full-year 2020, according to a report.
A report by UOB, PwC Singapore and the Singapore Fintech Association (SFA), titled FinTech in ASEAN 2021, released on Wednesday (Nov 10) showed that 167 deals, including 13 mega-rounds, or funding rounds of over US$100 million, accounted for US$2 billion or 57.1 per cent of total funding.
"The revival of investments in Asean's fintech industry has seen funding break through US$3.5 billion this year. Looking beyond this strong rebound, the opportunity to forge strong win-win-win partnerships between incumbent banks, fintech firms and ecosystem platform players and expanding across the region will remain instrumental in propelling the sustainable growth of ASEAN's fintech firms," said Janet Young, head of group channels and digitalisation, UOB.
Late-stage fintech companies, or Series C funding and beyond, garnered the most investor interest, securing 10 of 13 mega-rounds in 2021 so far. This signals a more cautious and risk-averse approach by investors to back mature firms that seem to stand a higher chance of emerging stronger post-Covid 19.
The payment sector saw the highest amount of funding as digital payment adoption spiked in the region, with investors placing more confidence in the segment. The sector saw a 244 per cent compound annual growth rate (CAGR) to US$1.9 billion in 2021, from US$562 million in 2020.
In terms of spikes in 2021 CAGR, investment tech led the way, recording a 493 per cent surge to US$457 million, from US$77 million a year prior. Cryptocurrencies come second at 424 per cent to US$356 million, from US$68 million previously.
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Alternative lending and insurance tech recorded relatively modest gains at 78 per cent and 10 per cent respectively to US$314 million and US$109 million. This is the first time in 6 years that alternative lending has been pushed out of the top three spots in terms of funding.
"With digital payments becoming the norm, and areas such as wealthtech and crypto assets fast gaining interest, our research findings are indicative that consumers in ASEAN have come to embrace a wide range of fintech solutions along with the digital experience, and that they are ready to take on the digital future," said Wanyi Wong, fintech leader, PwC Singapore.
Singapore continues to hold pole position in Asean for funding, securing 49 per cent of the 167 deals totalling US$1.6 billion. This includes 6 mega rounds worth US$972 million altogether.
"Singapore, in particular, has seen the most robust funding, supported by a growing number of fintechs looking to set up their headquarters here due to the strong regulatory support, opportunities for regional collaboration and a flourishing startup-focused investor ecosystem," said Shadab Taiyabi, president of SFA.
Indonesia retains its second place spot, with 26 per cent or US$904 million funding secured. Vietnam comes in third with 11 per cent or US$375 million of funding secured, due to 2 mega-rounds.
Singapore and Indonesia also had funding secured by fintech firms across all fintech segments, including blockchain in financial services, banking tech, finance and accounting tech, and regulatory tech.
"The question is no longer whether fintech will transform the business landscape, but how to best adopt and embed a fintech-centred strategy, underlined with inclusion, trust, transparency and accountability, to emerge as market leaders," said Wong.
Read more:
- Q1 Apac fintech funding data signals improving appetite for digital lending: S&P
- A record year for Singapore fintech
- Singapore fintech funding rebounds in Q2 to US$278m
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