Despite a significant year-on-year (YoY) decline, fintech retained its position as the most active tech sector in mergers and acquisitions (M&A) activity across Southeast Asia in 2023.
This performance, shared in the SE Asia Tech M&A Review June 2024 report by DealStreetAsia, reflects the sector’s resilience and continuous innovation.
The report, released in June 2024, highlights a sharp decline in M&A activity across the region in 2023. Though the number of fintech M&A deals fell by a notable 56%, the sector led as the top-performing tech vertical, with 15 transactions recorded for the year. This placed fintech ahead of software and IT (14), marketing tech (12), human resources (HR) tech (8), e-commerce (7), and traditional financial services (7).

Notable M&A transactions in 2023 included the acquisition of insurtech firm Singlife by Sumitomo Life Insurance Company at a valuation of US$1.2 billion. Another significant deal was Kasikorn Bank’s purchase of cryptocurrency exchange Satang, valued at US$100 million.

Tech M&A activity in Southeast Asia
In 2023, Southeast Asia’s overall tech M&A activity experienced a significant downturn, with total deal volume falling by 34% YoY to 114.

This sharp decline was largely driven by a drop in domestic transactions. Acquisitions by domestic companies fell 49% YoY to 40 deals, which is significantly sharper than the 22% drop in acquisitions by foreign companies. Domestic acquisitions accounted for 35% of total tech M&As in 2023, the lowest share since at least 2018.
Singapore, which led in foreign acquisitions in 2022 with 32 deals, witnessed a staggering 84% drop to five deals in 2023. Domestic acquisitions in Singapore also fell by 63% YoY to 14 deals.
Consequently, 74% of tech M&A in Singapore in 2023 (40 deals) were driven by foreign acquisitions, higher than 52% in 2022.
The US emerged as the top foreign acquirer in 2023, overtaking Singapore by completing 18 deals across the region, up from 16 the previous year. China and the UK shared the second spot with seven deals each, followed by Japan with six transactions.

Across the major Southeast Asian nations, Indonesia witnessed the sharpest drop in tech M&A deals, which declined by 51% YoY to 23 transactions. This fall aligned with the sustained decline in venture funding of more than 60% for two consecutive years.
Singapore, typically the leading contributor to tech M&A deals in the region, saw a 33% reduction in deal volume in 2023 to 54. Malaysia, which had maintained a steady flow of deals from 2020 to 2022, also experienced a decline, with deal volume dropping 38% to 13 in 2023.
Conversely, Vietnam was the only market in the region to see momentum in 2023, with total deal volume increasing to seven from five in 2022.

Southeast Asia M&A trends in 2024
In 2024, M&A activity continued to weaken further in Southeast Asia, with total deal volume falling by 34% YoY to only US$22 billion in H1, compared to US$85 billion for all of 2023, according to Elizabeth Lin, the head of corporate finance and advisory at the United Overseas Bank (UOB) in Singapore.
The number of deals also dropped significantly, with 300 transactions in H1 2024, compared to over 800 in 2023.
However, the ongoing fall in interest rates should boost M&A appetite going forward, Lin predicts. Additionally, regional economic growth is projected to rise to 4.8% in 2024, up from 4.2% in 2023. These improved economic prospects are expected to reignite M&A interest and create favorable conditions for dealmaking across the region, she said.
Lin expects industries including healthcare, infrastructure, telecommunications (including telco towers and data centers) and renewables to continue to be M&A deal drivers. Areas to look out for include digital transformation, notably artificial intelligence (AI) and other emerging technologies. Furthermore, green technology, fueled by change and environmental, social and governance (ESG) considerations, is set to drive continued in renewables.
Featured image credit: edited from freepik