Is fintech a good investment in Indonesia, Malaysia and Vietnam?


Is fintech a good investment in Indonesia, Malaysia and Vietnam?

Before starting the analysis about the investment of fintech, FinFan want to give the best wishes for all best wishes to all Muslims “Ramadan Mubarak.” in Indonesia, Malaysia and Vietnam.

On 21st March the government of Malaysia feels excited when Amazon Web Services (AWS) announced plans this month to invest $6 billion in Malaysia over the next 14 years and hailed it as a win for the country (sourced by Nikkei Asia)

This event shows us the fierce competition between Indonesia, Malaysia and Vietnam for receiving foreign direct investment (FDI), when Southeast Asia will be the next ideal destination for investors from around the world because of its fast-growing technology.

With this growth of technology, fintech has played a big role to lure capital to these three technology-developing countries. Is fintech a good investment in Indonesia, Malaysia and Vietnam? Let’s find out with FinFan.

Why FinFan choose these 3 countries instead of Singapore, the most developed technology in general and fintech in a particular country in Southeast Asia?

FinFan doesn’t negate that Singapore is the most developed fintech country in Southeast Asia. However, Singapore’s fintech is growing quite far from the last countries of Southeast Asia (including the second one Indonesia).

First is the most developed country in Southeast Asia Indonesia

Indonesia, Southeast Asia’s largest economy, has emerged over the past couple of years as one of the region’s biggest fintech hubs.

Home to 785 fintech companies, as of late 2021, Indonesia is currently Southeast Asia’s second largest fintech startup community. These companies secured 26% of all fintech funding amount across Southeast Asia, second only to Singapore (44%), showcasing the scale and weight it has on the region’s fintech ecosystem.

Indonesia’s booming fintech sector has been driven by a number of factors, including the rise of digital merchants, accelerating consumers’ adoption of fintech solutions, and bullishness in the investor community regarding the prospects of digital financial services domestically.

Here are the top 3 fintech start-ups in Indonesia:

  • *Xendit - a fintech company that provides payment solutions and simplifies the payment process for businesses of all sizes in Indonesia, the Philippines and across Southeast Asia. This company has total VC funding raised to US$538 million.
  • Akulaku - a banking and digital finance platform in Southeast Asia, with a presence in Indonesia, the Philippines, and Malaysia. It closed US$100 million in funding in February to “further expand the geographic reach” of its offerings across Southeast Asia.
  • Dana - a digital wallet that provides payment infrastructure and financial services in Indonesia. Dana has raised US$250 million in disclosed funding and is valued at US$1.13 billion, according to CB Insights.*

*Sourced by Fintech News Singapore

The second good fintech investment country in Southeast Asia is Malaysia

The event above: “Amazon Web Services (AWS) announced plans this month to invest $6 billion in Malaysia over the next 14 years” show us the chance for this “Asian tiger” nation.

Malaysia’s financial sector has now included financial technology, or fintech to become one of its central areas of focus given its potential for rapid expansion. Malaysian consumers and businesses are prepared to adopt fintech, especially when considering the country's increasing middle class, high mobile phone usage, and strong government assistance for economic modernization.

In Malaysian fintech, digital payments and e-wallets are paving the way, bolstered by emerging trends and developments like artificial intelligence and machine learning, digital transfers, cryptocurrency, crowdfunding, and other kinds of financial innovations.

Here are the top 3 fintech start-ups in Malaysia:

  • **BigPay - an e-money operator with remittance and lending services. In August 2021, BigPay raised US$100 million in financing from South Korean conglomerate, SK Group, which it said it will use to introduce new products including digital personal loans, transactional lending, and an offering for micro, small and medium-sized enterprises (MSMEs).
  • TNG Digital – an e-wallet was formed in 2017 as a joint venture between CIMB Group’s Touch ‘n Go and Ant Group’s Alipay in 2017. AIA and New York-based investment firm Bow Wave Capital Management reportedly took a stake in TNG Digital which valued it at RM 3 billion. CIMB Group CEO Dato’ Abdul Rahman Ahmad told reporters during a press conference that the total funding raised during that round was US$ 75 million.
  • Boost - the fintech arm of publicly listed Malaysian multinational telecommunications conglomerate Axiata, unifying financial services spanning payments, micro-financing, micro-insurance, and most recently digital banking. Boost has the total funding raised for its fintech business amounts to a total of US$ 70 million.**

**Sourced by Fintech News Malaysia

The last good fintech investment country in Southeast Asia is Vietnam

Fintech in Vietnam has been growing up for the last 6 years depending on the exploration of MoMo e-wallet and the appearance of Finhay, just like FinFan mentioned in the article “4 Trends of Fintech in Vietnam 2023”.

According to a report by Robocash Group, an online lender, Vietnam is one of the leading countries in the ASEAN region in terms of fintech funding, second only to Singapore.

Accordingly, 93% of all venture capital investments in the country are directed to the e-wallet and cryptocurrency segment. Every second, Vietnamese people use at least one Fintech service. The demand for digital services, including transactions, payments and wallets among Vietnamese people is remarkable.

This is a young and promising market, with a valuation that has increased from 0.7 to 4.5 billion USD since 2016.

Read more:

. 3 best e-wallets in the Vietnam fintech market