SEA Fintech Retains Strong Interest even as Deal Volume Declines

In DealStreetAsia’s latest report, total deal count in Southeast Asia recorded a quarter-on-quarter decline of about 20% – a sharper contraction than the one two years ago when countries in the region first started implementing nationwide lockdowns to curb the spread Covid-19.

Investors are definitely shifting their focus from growth to profitability after five quarters of extended growth, amidst a highly uncertain macroeconomic climate.

However, not all startups share the same fate of a significant funding slowdown. Startups in the fintech services are still attracting strong interest. DealStreetAsia reports that “…one in every four dollars of venture funding went to fintech startups in 2021. This trend was repeated in the first quarter. By the second quarter, the share of fintech startups increased to 46% of the total deal value.”

The funding into fintech startups is largely driven by decentralised finance (DeFi) startups, which are blockchain-powered fintech firms. In fact, DeFi startups continue to defy the ongoing crypto bear market and contributed about 33% of total fintech deal volume in Q2 2022, as per DealStreetAsia’s report.

Our venture partner Genping Liu, a keen observer of DeFi activities, believes investments into early stage DeFi startups will continue, as he says “During the market peak last year, there were many new funds that managed to raise capital. This provided them with enough dry powder for deployment in the following two to three years.”

Read the full article here.

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