Tracxn: SEA FinTech Startup Funding Drops 25 Percent in First Half of Year

Total funding to Southeast Asia (SEA) FinTech startups fell 25% to $899 million in the first half of 2024, from $1.2 billion a year ago. Tracking he said on Friday.

The global software-as-a-service (SaaS)-based market intelligence platform said in its “Geo Semi-Annual Report: SEA FinTech H1 2024” that funding also saw a 31 percent decline from the $1.3 billion raised in the second half of 2023.

According to the firm, the SEA FinTech startup ecosystem saw its highest half-year funding in the second half of 2021, before declining significantly thereafter.

He said that current macroeconomic conditions and geopolitical issues have further contributed to the downward trend, making the first half of 2024 the least funded half year in the last three years.

The company further noted that this downward trend was driven by declining early- and late-stage investments.

Late-stage investment decreased 47% from $632 million in the first half of 2023 to $338 million in the first half of 2024.

Early-stage investment totaled $42.5 million in the first half of 2024, down 53% from $90 million in the first half of 2023.

However, early-stage funding increased 17% from $443 million in the first half of 2023 to $519 million in the first half of 2024.

There were only two $100 million rounds in the first half of 2024, compared to four in the first half of 2023 and the second half of 2023.

ANEXT Bank raised $148 million in a Series D round, while GuildFi million secured $140 million in a Series A funding round.

Investment tech, alternative lending, and banking tech are the best-performing segments based on FinTech funding in the first half of 2024 over the time frame considered.

A decline in funding was observed in multiple segments.

However, the technology investment segment received total funding of $216 million in the first half of 2024, up 666% from $28.2 million in the first six months of 2023.

The alternative lending segment raised $206 million in the first half of 2024, down 59 percent from the $502 million raised in the first half of 2023.

Banking tech firms raised $186 million in the first half of 2024, up 59% from $117 million raised in the first half of 2023.

None of the companies in this sector went public in the first six months of 2024.

However, there has been an increase in the number of acquisitions, from 11 in the first half of 2023 and 13 in the second half of 2023 to 16 in the first half of 2024.

Singapore leads the way in terms of funding in the sector, accounting for more than half of total investments.

FinTech firms based in Singapore raised $518 million in the first half of 2024, while those based in Bangkok and Jakarta raised $140 million and $128 million, respectively.

East Ventures, Y Combinator and 500 Global are the largest investors ever in this sector.

Antler, Hashed, and AppWorks were the leading investors in early-stage investment rounds in the first half of 2024, while MassMutual Ventures, Illuminate Financial, and Nyca Partners were the leading early-stage investors.

MUFG Innovation Partners and NewView Capital were the lead investors in late-stage investment rounds during the period.

“Despite some challenges, there is considerable optimism for the long-term growth of this region,

“Factors such as the young population, large consumer base, reliance on informal financial and trading systems, and government initiatives are expected to accelerate growth in this region,” Tracxn said.

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