In Q2 2024, fintech startups in Asia raised US$1.2 billion in venture capital (VC), bringing the total VC funding for H1 2024 to US$2.4 billion.
The sum represents a year-over-year (YoY) decline of 17.2%, continuing a downward trend that began in 2022 due to market uncertainty, economic volatility, and profitability concerns, data from a new CB Insights report show.
The “State of Fintech Q2 2024” report, reveals that fintech funding in Asia has decreased significantly this year, reaching its lowest half-year funding level in at least six years, the data show.
Low funding levels in Asia are primarily due to a lack of mega-rounds of US$100 million and up.
Only two such deals were recorded in H1 2024: HashKey Group, a Hong Kong digital asset financial services group, secured US$100 million in a Series A funding round in January 2024, and Ascend Money, a Thai digital financial services services provider, raised a US$195 million Series D in June 2024.
Despite the overall decline, Southeast Asia remains attractive to investors this year.
In H1 2024, the 20 largest VC deals in Asia totaled US$1.109 billion, with Southeast Asian fintech startups securing 37% of that amount (US$411 million) across seven deals.
Global fintech funding trends
Fintech funding activity in Asia aligns with global patterns. Worldwide, fintech funding fell by 32% YoY, dropping from US$24.1 billion in H1 2023 to US$16.4 billion in H1 2024.
However, quarterly fintech funding saw a notable 19% increase quarter-over-quarter (QoQ) in Q2 2024, reaching US$8.9 billion. This surge was driven by two large late-stage deals: Stripe’s US$694 million Series I, and AlphaSense’s US$650 million Series F. Stripe is a leading American financial infrastructure platform for businesses, while AlphaSense is a market intelligence and search platform.
H1 2024 saw a notable shift towards mid- and late-stage transactions. The share of mid- and late-stage deals increased to 20% in H1 2024, up from 17% in 2023, indicating an improved operating environment and growing investor confidence in later-stage companies compared to the past two years.
This trend is especially evident in verticals like payments and lending. In payments, mid- and late-stage rounds made up 27% of deals in H1 2024, against 21% in 2023. Notable deals in the sector included Stripe’s Series I, Ramp’s US$150 million Series D-2, and Guesty’s US$130 million Series F. Ramp is an American spending management platform, and Guesty is a property management software platform.
In digital lending, mid- and late-stage deals made up 35% of deals in H1 2024, compared to 20% in 2023. Notable deals included Fibe’s US$66 million Series E, Colendi’s US$65 million Series B, and Brim Financial’s US$63 million Series C. Fibe, formerly known as EarlySalary, is a consumer lending startup from India, Colendi is a Turkish digital banking startup, and Brim Financial is a Canadian credit card platform and payment automation specialist.
In comparison, early-stage deals made up 72% of fintech deals in H1 2024, down from 74% in 2023. Deals in that stage were driven by digital asset companies, a sector which recorded renewed focus as the crypto winter thawed. Digital asset companies accounted for nearly one-third of the top 10 seed/angel and top 10 Series A rounds. The two largest early-stage deals in the crypto space were TradeDog Market Manager’s US$75 million seed round, and Biton’s US$44 million Series A.
Featured image credit: edited from freepik
