Fintech Companies in Southeast Asia Raised US$1.4B in Q1 2022

After underwhelming performances in 2020, fintech funding in Southeast Asia regained some of its strength in 2021, a dynamism that remained in Q1 2022.

During the first quarter of the year, Southeast Asian fintech companies raised a total of US$1.4 billion, a sum that represents a 16.7% year-on-year (YoY) increase, data from Dealroom show.

Venture capital investment in fintech in Southeast Asia, Source: Dealroom, 2022

Combining Dealroom’s data with a S&P Global Market Intelligence May 2022 report shows that Southeast Asia made up about 40% of total fintech funding in Asia-Pacific (APAC) in Q1 2022, showcasing the region’s vibrancy.

Quarterly VC funding to APAC fintechs, Source: S&P Global Market Intelligence, 2022

Q1 2022 was a record quarter for fintech funding across APAC, which totaled US$3.33 billion through more than 186 deals. The figures surpass previous deal values and volumes observed in the March quarter over the past three years, data from S&P Global Market Intelligence show.

The momentum continued in Q2 2022, with several mega-rounds of US$100 million and over being recorded across the region. These include a US$210 million round closed by Filipino fintech leader Voyager Innovations, a US$300 million Series D secured by Indonesian payment infrastructure platform Xendit, a US$113 million Series B fundraise by Indonesian crypto trading platform Pintu, and a US$100 million Series B closed by Indonesian payment platform Flip.

Digital lenders take the spotlight

Interest in digital lending was high in Q1 2022. The segment topped all other fintech categories with US$1.28 billion raised across 52 deals. Of the top ten largest rounds of the quarter, five were raised by digital lenders, the S&P Global Market Intelligence report shows.

Interest in digital lending remained in Q2 2022 with already a number of noble rounds being closed these past three months: Indonesian digital lender Julo bagged US$80 million in equity and debt; and Singaporean lender Capital C raised S$74 million to launch new products and expand regionally.

Digital lenders accounted for 38% of total funding amount raised by APAC fintechs in Q1 2022, Source: SP Global Market Intelligence, 2022

Digital lending was the hardest hit fintech category during the pandemic as investors feared a spike in loan defaults. Some players, however, managed to prove their resilience through uncertain times, spurring the return of investors’ confidence, the report says.

But macroeconomic uncertainties surrounding rising interest rates and stock market declines could very well impact fundraising for APAC fintech companies and lead to a cool-off in the coming quarters, the firm predicts.

India leads fintech funding in APAC

In Q1 2022, Indian companies continued to dominate fintech funding in APAC, accounting for 42% and 34% of total deal value and volume in the region, respectively.

Fintech funding in India during the quarter was driven by large rounds, among which five of the ten largest fundraisings in the region:

  • Pine Labs, a merchant platform company, received US$205 million across three separate rounds and is preparing for an initial public offering (IPO) later this year;
  • Oxyzo, the financial services arm of business-to-business (B2B) e-commerce firm OfBusiness, closed a US$200 million Series A to expand its digital financial services play and scale other fee incomes business lines including debt capital markets and securities;
  • CredAvenue, a one-stop shop for enterprise debt, raised US$137 million to scale its platform, improve the depth of its offerings and expand to key global markets;
  • Finzoom, the operator of stock trading app INDmoney, secured US$86 million to launch new products, including a credit-card-based offering linked to a digital banking account; and
  • Refyne Tech, an earned waged access provider, raised US$82 million to scale, expand into different geographies, develop more products and hire more people.

APAC fintechs that raised the most money in Q1 2022, Source: SP Global Market Intelligence, 2022

Featured image credit: Edited from Unsplash

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