Bullish investors pour $150m into Southeast Asian fintech startups

Guess who clinched the largest funding round.

Now might be the perfect time to be a fintech startup in Southeast Asia, where a large unbanked smartphone-wielding population and extremely strong government support are creating a perfect storm for disruptive new companies.

A report by research firm Tracxn shows that over $300M has been invested in FinTech startups since 2007 in the region, with around $150M invested in 2015 alone.

The report, which was published in collaboration with venture capital firm East Ventures and tech company Lenddo, showed that payments and investment tech are the top funded sectors in the region.

For instance, the largest funding round in the region was in cross-border multi-currency trading platform M-DAQ, which secured $82M in funding from EDB Investments in November 2015. EDB Investments is the dedicated corporate investment arm of the Singapore Economic Development Board.

“Southeast Asia is definitely an interesting market for FinTech. In Southeast Asia, many countries like the Philippines and Indonesia have a large, unbanked population,” said Willson Cuaca, Founding & Managing Partner, East Ventures.

The report showed that Southeast Asia has seen a steady spike in the number of funding rounds year-on-year, touching almost 60 in 2015. Of the total around 140 rounds of funding since 2011, 59 took place in 2015, with a significant increase in late stage funding year-on-year. Singapore took a lion’s share of late-stage funding rounds, accounting for more than 60 percent of total number of series rounds.

Altona Widjaja, Vice President, OCBC Bank, notes that it is time for the banks to co-create with external ecosystem partners like fintech startups, rather than compete.

“The market infrastructure and regulatory support would vary with each country in SEA, but there’s a high chance of replicating the initiatives in other SEA countries especially in Malaysia and Indonesia.” OCBC Bank is one of the first in Southeast Asia to have launched an open API platform for developers to integrate the bank's products and services when building applications and programmes,” Widjaja said.