In 2022, the countries of South & Southeast Asia saw a YoY decline of 83% in new fintechs, with only 349 startups emerging in the region. However, the volume of investments has not decreased so dramatically, with investors choosing less risky strategies, as revealed by the analytical centre of Robocash Group.
The newly formed fintechs were able to raise about USD 153 M via various financing rounds. This is 1.4% of the total attracted investments in fintech in this region.
The Payments & Transfers sector accounted for the largest number of new companies in SEA & SA – 72 (20.6% of the total), mostly concentrated in India. Meanwhile, Blockchain & Crypto and Exchange-traded assets featured 47 companies each (13.5%), most of which were based in Singapore. Finally, there were 38 new alternative lending companies (10.9%).
However, the total amount raised by all fintech companies in the region decreased to USD 12.7 Bn (-38.6% compared to 2021). Robocash Group analysts cite the lack of public information, as investment aggregators are still adding new company profiles. Still, the missing data is unlikely to make a significant difference in the total showing for 2022, especially compared to the previous year.
“The decline in the number of new fintechs greatly exceeds the reduction in the volume of investment attraction. Investors are opting for less risky strategies, wary of the incoming worldwide recession. The market is “cleansing”, leaving room for only the most sustainable fintech companies”, comment the analysts at Robocash Group.
Assuming the current decade-long trend holds, Robocash projected that the number of new companies may grow by 21.6% in 2023 from the current 349 to 425. while the attraction of funds for all fintech companies may reach USD 13.2 Bn at the same time