Since Southeast Asia has long been one of the most resilient markets for fintech funding, it is worth discussing if the recent fall in funding could indicate a turning point. We think it might. Macroeconomic factors remain challenging, as they have since interest rates and inflation both spiked more than two years ago. Secondly, the fintech sector in the region is maturing to some extent. Investors are being more selective about which companies they fund.

If we look at a few of the biggest deals that occurred in Southeast Asia in the first half of the year, we see that they do not even involve true startups. For instance, ANEXT Bank raised US$148 million in March. ANEXT is no ordinary startup – it is the flagship digital banking project for Ant Group outside of China. Ant has a lot riding on ANEXT’s success, and we can expect it will continue to fund the online lender as needed.

It is no surprise, meanwhile, that Singapore continued to lead the region in funding, with US$1 billion. The No. 2 and No. 3 markets were Indonesia and Thailand which raised US$185 million and US$150 million respectively.

Familiar names top the list of leading investors in Southeast Asian fintech startups. SEEDS Capital, Temasek, and Seventure Partners led early-stage funding, while MUFG Innovation Partners, NewView Capital, and Avataar Ventures topped the late-stage investment charts. Antler, 500 Global Ventures and East Ventures were the top investors in the seed stage.

Compared to startup funding, the M&A deal landscape was more active in the first half of the year. 36 companies were acquired, up from 30 in the first half of 2023. The largest of the deals was the acquisition of Singlife by Sumitomo Life Insurance Company for US$1.2 billion.