Early-Stage Fintechs Grab Half of ASEAN Funding as Green Fintechs Gain Traction – Fintech Singapore

According to the recent “Fintech in ASEAN 2023: Seeding the Green Transition” report, jointly released by UOB, PwC Singapore, and the Singapore Fintech Association (SFA), there is a growing interest in sustainable finance solutions despite the broader funding winter affecting the region.

Key findings from the report

Overall decrease in fintech funding: There was a 70% reduction in fintech funding in ASEAN compared to the previous year, with a total investment of US$1.3 billion in the first nine months of 2023.

Singapore attracts record fintech investments: Despite the funding downturn, Singapore retained its leading position, securing US$747 million, or 59% of total ASEAN fintech funding. However, this was still a 65% decrease year-on-year despite having attracted 51 deals, the highest in the region.

The investments were distributed across eight fintech categories, the widest range in the region. Both Singapore and Indonesia accounted for over 86% of total fintech funding and 80% of funding deals in ASEAN.

Rise of green fintech: Green fintech firms gained substantial investor interest with US$169 million in funding in the first 9 months of this year, and investments for this sector has shown an upward trend in the past five years.

Increasing climate-related regulations, government support and rising awareness of environmental issues has supported this segment’s growth.

Early-stage firms’ resilience: Early-stage firms in ASEAN captured market opportunities effectively, with six of the top 10 funded fintech firms being in early stages of development and one of the only three deals above US$100 million.

They also secured half of the total funding investments in ASEAN, a significant increase from 39 per cent last year.

Reduced number of new fintech firms: There was a more than 75% decrease in the number of new fintech companies established in ASEAN compared to the previous year. A “volatile market and uncertain macroeconomic outlook” was cited as the reason for this.

Emerging focus on AI: Rapid advancements in artificial intelligence technology are identified as a key area for future fintech innovation.

The full report, announced at the Singapore Fintech Festival, is available here with more insights and detailed analyses of the ASEAN fintech landscape.

Janet Young, Managing Director and Group Head, Channels & Digitalisation and Strategic Communications & Brand, UOB said,

“Despite markets and investors becoming more cautious this year, bright spots remain with certain fintech segments such as early-stage and Green fintechs showing resilience.

As a long-term supporter of fintechs, UOB is committed to journeying through this uncertain climate with the broader fintech and green tech ecosystem by leveraging on our regional network to seize opportunities and drive innovation.”

Shadab Taiyabi, President, Singapore Fintech Association, said,

“While the landscape for fintech funding across the region has certainly been trickier to navigate, it is good to see that Singapore retains its position as the region’s most vibrant destination, attracting the highest number of deals.

It is heartening to us that investors recognise the quality of Singapore’s firms and their ideas, and we are confident that despite lower levels of funding, Singapore’s fintech star will continue to shine brightly not just across the region, but worldwide.”

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• Source: https://fintechnews.sg/80503/singapore-fintech-festival-2023/early-stage-fintechs-grab-half-of-asean-funding-as-green-fintechs-gain-traction/