Fintech Research
Has Grab got its mojo back?
Investors seem happy with Grab’s Q2 results. Since the self-proclaimed Southeast Asian super app said last week that it expects to break even in the third quarter rather than the fourth quarter, while its quarterly losses narrowed and revenue rose 77% to US$567 million, its shares have risen 17%. But questions remain about the long-term viability of Grab’s business model.
Why APAC fintech funding has plummeted this year
What goes up must come down says Newton’s law of gravity. It doesn’t technically apply to fintech funding, but can, at least in figurative sense, be a useful paradigm for exploring why the funding spigots in the Asia-Pacific region are no longer gushing forth large capital injections. According to a recent KPMG report, fintech funding in the region fell to just US$5.1 billion in the first half of the year, a dramatic decrease from the record-breaking US$45 billion raised during the same period a year earlier.
When it comes to fintech in South Asia, India has long dominated, whether in terms of overall investment, unicorns, or the broader ecosystem. While India will no doubt remain the biggest player in the region for the foreseeable future, its neighbors have an increasing number of market opportunities.
P2P lending in Indonesia grows steadily
Peer-to-peer (P2P) lending has become a big industry in Indonesia in recent years, with an estimated 250 trillion rupiah (US$17 billion) loans disbursed in 2022, up from about 155 trillion rupiah (US$10.2 billion) in 2021. The first six months of 2023 saw a 28% growth in the P2P lending market, according to market research firm YouGov.
The embedded finance opportunity in Asia
As technology has improved over time, so have financial services. Embedded finance – financial services provided via non-financial platforms or apps – is another iteration of this journey, and it is playing out in real time throughout Asia’s financial ecosystem.
Does Sea have an ecosystem problem?
Sea Group is no longer losing hundreds of millions of dollars. Instead, it’s making tens of millions. In the quarter ended March 2023, Sea posted a profit of US$88.1 million. With Sea now reaching the promised land of profitability, one would think that investors would react exuberantly. Not so. Instead, Sea’s stock slid almost 18% on May 16, the day it announced Q1 earnings, to close at US$72.45.
The super app ambitions of MoMo
Vietnam is a unique fintech market. It may be the most fragmented of all the major ones in Southeast Asia, where dominant players have yet to emerge in most market segments. Because of the extreme fragmentation, Vietnam has produced fewer unicorns than Indonesia or the Philippines, and that makes the ones that do exist all the more notable. The one fintech firm in Vietnam that can realistically make a play for super app status is MoMo, which hit the US$1 billion valuation in December 2021 and has continued its steady ascent since.
AI is ascendant in APAC financial services
The rising ubiquity of smartphones together with broader digital transformation in the business world are catalyzing the adoption of artificial intelligence (AI) in the financial services sector. As AI matures and becomes more widely integrated into business operations, this trend is set to accelerate.
Revisiting the fintech ambitions of AirAsia
During the pandemic, the idea of a travel-focused super app built on top of an airline and focused on the Asia-Pacific region seemed iffy. After all, international travel was grounded in Asia for longer than anywhere else in the world. But with the pandemic in the rearview mirror at last, Capital A CEO Tony Fernandes’ idea is starting to make more sense. All the groundwork AirAsia did to build its super app may come to fruition before long.
How will the restructuring of Alibaba affect Ant Group?
It’s been a long and humbling road for Ant Group since the abrupt cancellation of its expected blockbuster IPO in November 2020. The nixed IPO marked the beginning of a wider crackdown by the Chinese authorities on tech giants that had gotten too big for their own good. Since then, we have strained to read the tea leaves and figure out just how much Ant would be cut down to size when the IPO could get back on track. The decision by regulators to require Ant’s parent company Alibaba to become a holding company divided into six different business groups suggests that the restructuring of the internet giant has reached an inflection point.
More...
The role of fintech in growth markets
Despite Covid-19’s impact on the global economy, the steady pivot to digital financial services has helped fintech and the overall financial services industry emerge from the pandemic relatively unscathed. Indeed, during the low-interest rate environment of the past few years, fintech valuations increased dramatically across nearly every market segment, especially in certain areas like crypto.
Fintech sector in Indonesia is down but not out
What goes up, most come down, even in a huge country with significant financial inclusion needs. In recent years, Indonesia has been a hotspot for fintech investment, and that remains true, relatively speaking, but Southeast Asia’s largest economy is seeing a slowdown as investors tighten their belts and it begins to sink in that the digital banking sector may be overly crowded.
2022 was a year characterized by slower fintech funding in most parts of the world, especially East Asia, where it had previously been growing expeditiously. East Asia’s premier fintech hub of Singapore, however, managed to buck the trend with funding hitting a three-year high of US$4.1 billion, up from US$3.4 billion the previous year, according to a new report by KPMG.
Pakistan’s fintech industry continues its brisk growth
With the world’s third-largest unbanked population, Pakistan is one of the last major nascent markets for fintech. In the past few years, fintech investment has picked up in the country thanks to rising investor interest, supportive government policies and a need for effective digital financial services solutions. Though the deal pipeline started to taper off towards the end of 2022, the long-term outlook remains bright.