The Tracxn Geo Annual Report: SEA FinTech 2023, based on our extensive database, provides a round-up of funding and other major developments in the Southeast Asia (SEA) FinTech space.
South East Asian countries, following the global economic crisis, took the most hit in 2023 as the tN8otal funding of $2 billion was the lowest in comparison to the last five years in this region.
The FinTech sector in SEA raised a total of $2 billion in 2023, a plunge of 65% from $5.9 billion raised in 2022, and a decline of 77% compared with $8.6 billion raised in 2021, the highest funded year of all time. The number of funding rounds, too, fell 50% to 142 in 2023 from 288 in 2022.
Seed-stage investments stood at $166 million in 2023, a decline of 68% from $522 million in 2022. SEA FinTech companies secured early-stage funding worth $836 million in 2023, 68% lower when compared with the $2.6 billion raised in the previous year. Late-stage funding worth $1 billion was observed in 2023, a 64% decrease from $2.8 billion raised in 2022.
Q4 2023 was the highest funded quarter of the year, while Q3 2023 was the lowest. SEA FinTech companies raised $689 million and $282 million in Q4 2023 and Q3 2023, respectively.
A downward trend was observed in the number of $100M+ rounds as well, which saw a significant decline to 6 in 2023 from 16 in 2022. Kredivo, Investree and Gojek were some of the companies that reported $100M+ rounds in 2023. No new Unicorns emerged during the year, similar to 2022.
The number of acquisitions fell to 19, a sharp contrast from 27 in 2022, and slightly higher than 17 in 2021. Further, only two companies from the SEA FinTech have gone public in the past three years, with one IPO each in 2023 and 2022.
The highest funding was observed in the Alternative Lending, Payments and Insurance IT segments. Companies in the Alternative Lending space attracted investments worth $700 million in 2023, which showed a growth of 11% compared to $632 million raised in 2022. The Payments segment secured a total funding of $270 million in 2023, this is a plummet of 87% from $2.1 billion raised in the previous year. Funding in the Insurance IT segment stood at $256 million in 2023, a sharp spike of 105% compared with $125 million raised in 2022.
Singapore took the lead in terms of funding in 2023, with FinTech companies based in the city raising $1.1 billion during the year.
East Ventures, YCombinator and 500 Global are the overall most active investors till date in the SEA FinTech sector. Antler, Saison Capital and Tenity were the top seed-stage investors in 2023, while Gobi Partners, Peak XV Partners and Openspace Ventures were the most active early-stage investors in 2023. EDBI, Prosperity7 Ventures and 01Fintech were the top late-stage investors in 2023.
