South-east Asia fintech funding continues decline, dips 25% in H1 2024: Tracxn
Singapore captures lion’s share of funding with US$518 million raised
FUNDING of fintech startups in South-east Asia has continued its decline since peaking in the second half of 2021, a report by data platform Tracxn has noted.
Fintech funding fell 25 per cent to US$899 million in the first half of 2024, from US$1.2 billion in H1 2023. This makes H1 2024 the least-funded half-yearly period in the past three years.
The bulk of funding, or US$556 million, was raised in the first quarter of the year, accounting for about 61.8 per cent of the funding for H1 2024.
Rising interest rates, ongoing conflicts, rising concerns over fintech startup valuations and a decline in demand have made fundraising challenging.
The decline in fintech funding was led by both the seed-stage and late-stage segments of the ecosystem. Seed-stage funding includes seed and angel rounds; late-stage funding includes efforts from Series C rounds onwards, private equity and pre-initial public offering (IPO) rounds.
Seed-stage funding fell 53 per cent to US$42.5 million in H1 2024, from US$90 million in H1 2023.
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Late-stage funding fell 47 per cent to US$338 million in H1 2024, from US$632 million in H1 2023. The drop is even more pronounced than the one in the previous half-year – down 61 per cent from the US$858 million raised in H2 2023.
Early-stage funding bucked the trend and rose 17 per cent to US$519 million in H1 2024, from US$443 in H1 2023. Early-stage funding includes Series A and B rounds.
Geographically, Singapore raised the most funds, amounting to US$518 million – more than half the total funding raised in the first half of 2024. Fintech companies based in Bangkok raised US$140 million, and those in Indonesia, US$128 million.
Investment tech was the brightest spot in fintech funding. It made a 666 per cent jump to US$216 million in H1 2024, from US$28.2 million in H1 2023. The payments funding fell the most, dropping 51 per cent to US$40.1 million in H1 2024, from US$82.6 million in H1 2023.
There were no recorded exits in terms of an IPO, and 16 acquisitions were made in the first six months of 2024. This was an increase from the 11 in H1 2023 and 13 in H2 2023. Among the deals this year was the Singlife acquisition by Sumitomo Life Insurance Company, which acquired TPG’s stake for US$1.2 billion among others.
The number of first-time institutional investors in South-east Asia fintech fell to 37 in H1 2024, from 64 in H1 2023. But the number was higher than the 34 in the second half of 2023.
Tracxn said that there is still significant optimism for South-east Asia’s long-term growth. A young population, large consumer base and government initiatives are expected to accelerate growth in the region.
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