A Tracxn Technologies report highlights that the Southeast Asia fintech ecosystem experienced its zenith in 2021, marking the highest annual equity funding in the last decade. However, 2024 saw a significant decline, with a total funding of USD $1.6 billion, representing a 23% drop compared to USD $2.1 billion in 2023 and a steep 75% fall from 2022’s USD $6.3 billion.

The decline is attributed to global macroeconomic conditions, rising interest rates, geopolitical tensions, and a recalibration of startup valuations. Funding has now reverted to pre-pandemic levels, creating a challenging environment for many players in the ecosystem.
Yet, optimism abounds. SEA’s young, tech-savvy population, a growing consumer base, reliance on informal financial systems, and supportive government initiatives aimed at financial inclusion serve as robust drivers for long-term growth.
Such a combination of demographic and policy-driven advantages suggests that despite the short-term downturn, the region holds immense potential for future growth and innovation.
The steady migration to digital financial services, further accelerated by the pandemic, has solidified fintech’s role in SEA. Consumers’ adoption of digital wallets, payment gateways, and alternative banking solutions has showcased a burgeoning demand for services that cater to underbanked and unbanked populations.
This demand is expected to fuel fintech innovations even in the face of current economic hurdles.
Decoding the Fintech Funding Rollercoaster
Examining the specifics of funding reveals a deeper narrative of the sector’s challenges and shifts. In 2024, 164 funding rounds were recorded, marking an 8% decline from 2023. This dip was evident across all funding stages.
Seed-stage funding saw USD $190 million raised, down 6.4% from USD $203 million in 2023 and 68% from USD $587 million in 2022. Early-stage funding, the critical phase for scaling startups, recorded USD $750 million, a 16% decrease from USD $893 million in 2023. Late-stage funding, typically seen as a barometer of maturity and investor confidence, fell sharply to USD $694 million—a 31% drop from USD $1 billion in 2023 and 77% from USD $3 billion in 2022.

The quarterly distribution of funds further illustrates the dynamics of the year. The first quarter of 2024 contributed USD $601 million, making up over 37% of the year’s total funding. This early surge underscores the resilience and adaptive strategies of a few standout startups.
However, the fourth quarter emerged as the least funded period, reflecting heightened caution among investors as economic uncertainties persist.
Fintech Segments Leading the Charge in Southeast Asia
Amidst the overall decline, Tracxn reports that certain fintech segments in Southeast Asia demonstrated resilience and growth. Payments emerged as a top-funded segment, securing USD $366 million, a 53% increase from 2023. This growth highlights the continued demand for seamless and secure transaction solutions, particularly in e-commerce and peer-to-peer payment platforms.

The cryptocurrencies segment attracted USD $325 million in 2024, marking a 20% year-on-year growth. Despite global regulatory challenges and volatility, this segment’s performance underscores the enduring appeal of blockchain technology and decentralised financial systems.
Banking Tech, another high-performing segment, garnered USD $265 million, a 63% rise from 2023. This growth is indicative of the region’s increasing appetite for technology-driven banking solutions that enhance efficiency and accessibility.
The ability of certain fintech verticals to adapt and thrive amidst challenges underscores their pivotal role in driving the region’s innovation forward. They also reflect a broader trend where innovation aligns closely with consumer demand and regional market conditions.
Unicorns in the Drought?
The SEA fintech landscape’s performance in 2024, in terms of unicorns and exits, was relatively muted.
The region witnessed the emergence of only one new unicorn: Polyhedra Network, an infrastructure provider for web3 interoperability. Achieving a valuation of USD $1 billion, Polyhedra Network raised USD $20 million in its Series B funding round, marking a bright spot in an otherwise subdued year.

Acquisitions saw a modest uptick, rising to 27 in 2024 from 26 in 2023. Among the notable deals was the acquisition of GHL, a payment services enabler, by NTT DATA for USD $154 million.
Such acquisitions highlight the ongoing interest in SEA’s fintech firms, particularly those offering scalable and innovative solutions.
However, the absence of any initial public offerings (IPOs) in 2024 starkly contrasted with the single IPO recorded in 2023, reflecting a cautious stance by companies and investors alike in navigating volatile markets.
Mapping the Heartbeats of Fintech Innovation in Southeast Asia
Geographically, Singapore retained its position as the leading fintech hub in SEA, attracting USD $955 million in funding. Jakarta followed with USD $242 million, while Bangkok secured USD $198 million.

These cities underscore the concentration of fintech activity and innovation, benefiting from favourable regulatory frameworks and vibrant startup ecosystems.
Key investors played instrumental roles in shaping the fintech narrative in SEA.
Prominent names such as East Ventures, Y Combinator, and 500 Global remained active, providing critical support to startups.
Seed-stage funding was notably backed by investors like Antler, Mirana, and Alliance DAO, demonstrating their commitment to nurturing early-stage ventures. Early-stage funding leaders included UOB and Argor Capital Management, while NewView Capital and The Rise Fund dominated late-stage investments.
These investors’ strategic involvement reflects a belief in the region’s long-term potential, despite current challenges.
The Regulatory Tightrope
While there are bright spots, the Southeast Asia fintech sector faces significant challenges, the Tracxn report shows.
Rising interest rates have increased borrowing costs for startups, while geopolitical instability adds layers of uncertainty to cross-border investments. Declining demand across several sectors, coupled with concerns over inflated startup valuations, has dampened investor confidence.
These factors, combined with a cautious global economic outlook, underline the need for fintech firms to adapt, innovate, and optimise their operations to survive and thrive.
Moreover, the regulatory landscape remains a critical variable. With governments in SEA grappling to balance innovation with consumer protection, fintech firms must navigate a complex web of compliance requirements. Striking this balance will be crucial for fostering a sustainable and competitive ecosystem.
The Next Chapter for SEAs Fintechs
The Southeast Asia fintech sector is at a crossroads, and its next chapter will likely hinge on learning from its leaders.
Singapore’s focus on creating a stable and transparent regulatory framework offers a roadmap for emerging hubs. Its commitment to balancing innovation with oversight has attracted global investors and startups alike.
On the other hand, Jakarta and Bangkok demonstrate the importance of localisation, with solutions that address specific gaps in their financial systems, such as digital payments for the underbanked or fintech tools for small businesses.
However, the region’s path forward will not be without its challenges. Nations aspiring to emulate Singapore or Jakarta must address entrenched issues, including uneven digital literacy, regulatory fragmentation, and a lack of cross-border collaboration. Without cohesive strategies, these hurdles could stifle growth.
SEA’s fintech future depends on its ability to foster an interconnected ecosystem. Regulatory harmonisation and regional cooperation could unlock opportunities for seamless cross-border solutions, but achieving this will require political will and sustained effort.
If the region succeeds, it might not only replicate the success of its leading cities but also create a globally admired fintech network.
The next few years will be critical.
Based on the report by Tracxn, there is a question that lingers on my mind: Will the fintech industry in Southeast Asia rise as a united front, or will it remain a patchwork of isolated successes?
Whatever the answer may be, I hope that it will shape not just the region but also the global financial landscape.
Featured image credit: Edited from Freepik