SEA FinTech investment landscape
The FinTech sector in Southeast Asia (SEA) has been flourishing in recent years, with ever-increasing capital flowing into the region from global investors and market leaders. In our latest insight, we take a closer look at the key trends that make SEA an attractive FinTech market, the dynamics within key FinTech verticals, and how we expect financing activity to evolve.
Key takeaways:
State of the Tech markets
- Global equities are experiencing high volatility and have been roiled over inflation fears, rising geopolitical tensions, and escalating interest rates
- High-growth companies are witnessing the greatest share price declines (>50%) as cash flows far out into the future are discounted harder, amid rate hikes
- While public Tech valuations appear to have plummeted, they have in fact eased down to the 10-year historical baseline
- The pace of private capital deployment may have moderated relative to 2021, but remains vigorous and surpasses that of all preceding years
- All-time high dry powder in 2022 is expected to fuel continued deal velocity
SEA FinTech landscape and exit thoughts
- SEA is one of the most vibrant Tech ecosystems globally with a booming FinTech sector
- Singapore and Indonesia account for two-thirds of SEA FinTech deals
- Payments and lending drive more than half the region’s FinTech deals by value; crypto/web3 companies have been gaining traction among earlier-stage investors amid growing institutional awareness
- Mounting unrealised value at a time when public listings/SPACs have lost their shine as a viable, attractive exit route
- Private financing rounds/M&A are expected to intensify over the longer term as the ecosystem matures and more investors flock to SEA to tap into the region’s growth, talent, and disruptive business models