SEA fintech investments drop 65% to $2b in 2023

Singapore made up over half of the investments, with its fintechs clinching $1.1b in total.

Southeast Asian fintechs saw investments plunge 65% in 2023 to just $2b, compared to $5.9b by the end of 2022, according to an annual report by data startup platform Tracxn.

The number of fundings rounds were halved to 142 in 2023, from 288 in 2022.

Seed-stage investments declined 68% to $166m, from $522m in 2022.

Early-stage funding for SEA fintechs also dropped 68%, to just $836b, a far cry from the $2.6b the region’s fintechs amassed in early-stage investments in 2022. 

Late-stage funding managed to break the billion-dollar mark in 2023, but it was still 64% lower than the $2.8b that SEA late-stage fintechs raised a year prior. 

Singapore took the lead in terms of funding in 2023, making up over half or $1.1b of the total fintech funding in SEA during the year. 

However, SEA fintechs did see a rise in funding by the end of the year, with Q4 as the highest funded quarter, Tracxn noted. SEA fintechs raised $689m in total during the quarter.

Meanwhile, Q3 is the lowest funded quarter, with the region’s fintechs only raising $282m.

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Fewer hundred million rounds
There were fewer $100m+ funding rounds throughout 2023, at just 6 throughout the whole of Southeast Asia– lower than the 16 such funding rounds in 2022.

No new unicorns emerged for the second consecutive year.

Acquisitions also dropped to just 19 deals in 2023, from 27 in 2022. However, the number is slightly higher than the 17 deals in 2021.

Only two SEA fintechs have gone public in the past three years, one IPO in 2023 and another in 2022.

Finance, insurance fintechs most popular
Alternative Lending, Payments and the Insurance IT segments were the three most popular segments for investors.

Companies in the alternative lending space attracted investments worth $700m in 2023– 11% higher than in 2022.

Meanwhile, although the payments segment clinched $270m in total funding in 2023, funding was still 87% lower than the $2.1m the segment’s fintechs got just a year earlier.

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Funding in the Insurance IT segment more than doubled in 2023, to $256m. This is a 105% spike from the $125m in funding the segment got in 2022.

East Ventures, YCombinator and 500 Global are the overall most active investors in 2023. 

Antler, Saison Capital and Tenity were the top seed-stage investors in 2023; whilst Gobi Partners, Peak XV Partners and Openspace Ventures were the most active early-stage investors during the year, according to Tracxn.

For late-stage investors, EDBI, Prosperity7 Ventures and 01Fintech were the most active.