Tech Funding in SE Asia Slows, With Significant Declines in FinTech, Late-Stage Investments

Southeast Asia’s tech sector has experienced a pronounced slowdown in funding during the first half of 2024, securing only $1.6 billion—a sharp 65% decline from the $4.5 billion raised in the same period last year, according to Tracxn’s latest “Geo Semi-Annual Report: SEA Tech H1 2024.”

This decline is also 37% lower than the $2.5 billion raised in the latter half of 2023, marking a cooling trend across the region’s technology landscape.

Fintech, previously a dominant force in regional tech growth, has not been immune to this downturn. In the first half of 2024, fintech startups raised $851 million, down 20% from the $1.07 billion recorded in the first half of 2023.

This decline reflects broader challenges in securing late-stage funding, which plummeted by 69% to $421 million from $1.3 billion in the second half of 2023, and a dramatic 86% from $3 billion in the first half of last year.

The report places Southeast Asia ninth globally in tech startup funding for the first half of 2024, indicating a significant fall in investor confidence or a shift in investment priorities globally.

While early-stage investments showed some resilience with a modest 8% increase from the latter half of 2023, totaling $946 million, seed-stage funding fell by 27% to $234 million.

The quarter-specific data paints an even grimmer picture, with just $477 million raised in the second quarter of 2024, an 85% decrease from $3.16 billion in the second quarter of 2023, and a 57% drop from the $1.12 billion in the first quarter of 2024.

Despite these challenging conditions, the period saw significant individual rounds with ANEXT Bank securing $148 million and GuildFi raising $140 million.

The acquisition landscape showed more activity, with 36 companies being acquired—up from 30 in the first half of 2023. Among these, the largest was the acquisition of Singlife by Sumitomo Life Insurance Company for $1.2 billion, underscoring ongoing consolidation trends in the market.

Singapore continues to lead the region in funding, having raised $1.1 billion in the first half of 2024, far outpacing Jakarta and Bangkok, which raised $185 million and $150 million, respectively.

This suggests a concentration of capital in more established markets within the region.

Investment firms like East Ventures, 500 Global, and Wavemaker Partners remain active, indicating sustained interest in the potential of Southeast Asian tech, despite the current slowdown.

Similarly, SEEDS Capital, Temasek, and Seventure Partners were highlighted as key players in early-stage funding.

This funding contraction reflects a broader recalibration within Southeast Asia’s tech sector as it navigates through evolving market conditions and investor sentiment, setting a cautious tone for the future of regional tech development, particularly in sectors like Fintech which have previously enjoyed robust growth rates.

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