Fintech funding in ASEAN rebounded strongly in 2021, up more than three times in the first nine months of 2021 compared with full-year 2020 to a historic high of $3.5 billion.
According to the Fintech in ASEAN 2021 report by UOB, PwC Singapore and the Singapore FinTech Association (SFA), the rebound in Fintech funding was driven by 167 deals including 13 mega-rounds, which accounted for $2 billion of the total funding.
Most investors showed strong interest in late-stage Fintech firms which secured 10 out of 13 mega-rounds
this year. This trend signals a shift in the strategy of investors across several ASEAN markets as they take
a more cautious and risk-averse approach of backing mature firms that are seen as standing a higher
chance of emerging stronger from the pandemic. Given the growing adoption of digital payments in ASEAN,
investors placed their confidence in and injected the highest amount of funds into, late-stage Fintech firms
from the payments sector.
Ms Janet Young, Head of Group Channels and Digitalisation, UOB, said, “The revival of investments in
ASEAN’s Fintech industry has seen a funding breakthrough of $3.5 billion this year. Looking beyond this
strong rebound, the opportunity to forge strong win-win-win partnerships between incumbent banks,
Fintech firms and ecosystem platform players and expanding across the region will remain instrumental in
propelling the sustainable growth of ASEAN’s Fintech firms.
“At UOB, we have long collaborated with Fintech partners to empower their growth with our deep
understanding of the cultural, business and regulatory nuances in ASEAN and by connecting them to our
regional ecosystem. Our close collaboration also enables us to tap on each other’s unique strengths and capabilities to create progressive financial solutions and seamless digital experiences that benefit our customers in an increasingly online world.”
Singapore-based Fintech firms continued to attract the strongest funding in ASEAN, securing almost half
(49 per cent) of the total 167 deals, amounting to $1.6 billion in funding. This includes six mega-rounds
worth $972 million in total.
Indonesia retained its second position this year, raking in $904 million in funding (26 per cent), followed
by Vietnam which rebounded sharply to $375 million in funding (11 per cent) as a result of two mega-rounds. Fintech firms in Singapore and Indonesia received funding in almost every category, an indication of a vibrant and growing industry with an active investment scene.
Mr Shadab Taiyabi, President at SFA, said, “We are heartened that the Fintech scene across Southeast
Asia continues to thrive and grow at a rapid pace, as attested by the strong rebound in financing this year. One key driver of this resurgence was the pandemic, which has catalysed digital adoption in Singapore and
across the region, driving the rise in digital payments and accelerating the shift towards digital channels
within the financial services sector.
“Singapore, in particular, has seen the most robust funding, supported by a growing number of Fintechs
looking to set up their headquarters here due to the strong regulatory support, opportunities for regional
collaboration and a flourishing startup-focused investor ecosystem. SFA remains committed to supporting
and facilitating the Fintech ecosystem to foster new opportunities for companies to collaborate, connect
Funds injected to investment tech and cryptocurrency firms in ASEAN saw the strongest growth this year,
taking both categories to the second and third place respectively after payments. This is also the first time
in six years that alternative lending has been edged out of the top three spots in terms of funding given the
increasing interest in digital investments and digital currencies among consumers.
Compared with 2020, funding for investment tech firms grew by six times to $457 million this year, in
line with growing consumer interest in the use of digital trading and wealth management tools. According
to a survey5 conducted by UOB, PwC and SFA, six out of 10 ASEAN consumers have used digital tools
such as robo-advisers and online brokerage platforms for their investment needs.
Funding for cryptocurrency firms came in third at $356 million as they attracted five times the funding
received in 2020. Given that nine in 10 ASEAN consumers have started or plan to use cryptocurrencies
and central bank digital currencies, the share of cryptocurrency firms in the region is expected to grow as
players tap into consumers’ rising interest.
Payments remained the most funded Fintech category in ASEAN this year at $1.9 billion and continued
to make up the majority of Fintech firms in most countries, except for Singapore (cryptocurrency) and
Thailand (alternative lending). Funding into these firms will accelerate the usage of e-wallets, debit and
credit cards and mobile banking apps which are already the most popular payment methods among ASEAN
consumers after cash.