As we venture forth into the new year it’s worth reflecting back on 2023 to provide us clues on what 2024 might look like. To get a sense of APAC’s up-and-coming fintech leaders, we take a look today at some of 2023’s largest VC-backed rounds fintech of funding in APAC, showcasing the startups that managed to beat the odds in the face of a challenging fundraising environment and global economic uncertainties.
Global venture capital (VC) flows into fintech companies plunged considerably in 2023, plummeting 46% in the first nine months of the year compared with the same period in 2022, according to an analysis by S&P Global Market Intelligence.
Fintech companies secured a total of US$29 billion through 1,655 funding rounds between January 01, and September 30, 2023, against 2,684 rounds worth US$54 billion during the same period the year prior.
Looking at regional trends, the analysis found that Latin America witnessed the sharpest decline in fintech VC investments, registering a 72% drop from Q3 2022 to Q3 2023. A similar trend was observed in Europe, the Middle East and Africa (EMEA), and North America, where fintech VC investments fell by more than half and by more than a third year-over-year (YoY), respectively.
Fintech funding in Asia-Pacific (APAC), on the other hand, showed resilience, raising US$1.9 billion in fintech VC funding in Q3 2023, nearly flat compared with the year-ago period. In terms of deal counts, fintech funding in APAC dropped 38% however, implying that larger rounds were secured during the period targeting more established and mature ventures.
So who were the most successful startups in securing fintech funding in APAC last year?
PhonePe – US$850 million, Growth Equity VC, India
Indian payment app PhonePe secured a total of US$850 million of primary capital in its 2023 round, reaching a valuation of US$12 billion. The new investment came at a time when PhonePe is aggressively expanding its product offerings, launching in early 2023 a hyperlocal commerce app, called Pincode. This deal represents the largest round fintech funding in APAC in 2023
Pincode is powered by the Open Network for Digital Commerce (ONDC), an Indian government initiative to democratize the e-commerce landscape by offering a zero-commission platform, and is designed to bridge the gap between offline and online shopping experiences.
PhonePe claims the app surpassed 50,000 installs on the Google Play Store within just one month of its launch, processing over 5,000 orders per day in May 2023.
Founded in 2015, PhonePe dominates transactions on the Unified Payments Interface (UPI), India’s instant payment system, processing over eight million transactions a month. The company claims more than 460 million registered users, and says it has helped digitize over 350 million offline merchants across the country. PhonePe is also the leader in India’s Bharat Bill Pay System (BBPS), processing over 45% of the transactions on the BBPS platform.
Micro Connect – US$458 million, Series C, Hong Kong
In August, Hong Kong-based fintech startup Micro Connect secured US$458 million in a Series C funding round from new and existing investors. According to Forbes Asia, the funding round valued the startup at US$1.7 billion.
Micro Connect, which operates a financial market platform that connects China’s micro and small businesses with global capital, said it would use the proceeds to support its effort to enhance its product offering, develop the world’s largest financial market for micro and small business investing, and support its expansion plans.
Founded in 2021, Micro Connect facilitates global institutional investments in micro and small businesses across mainland China. The company provides an exchange platform for daily revenue shares called the Micro Connect (Macao) Financial Assets Exchange (MCEX) on which stores in the food and beverage, retail, services and culture and sports sectors can access affordable long-term capital.
To date, Micro Connect claims it has provided more than US$238 million worth of funding to over 9,300 stores nationwide.
Kredivo – US$270 million, Series D, Singapore
Digital credit platform Kredivo secured in March a US$270 million Series D funding round. The company said it would use the proceeds to strengthen its leading position in the digital financial services industry in Southeast Asia by expanding its ecosystem, which includes online and offline buy now, pay later (BNPL) programs, personal loans and credit cards (physical and virtual), and support the upcoming launch of its neobank brand, Krom.
Kredivo CEO Akshay Garg declined to disclose Kredivo’s current valuation, but told TechCrunch in March 2023 that it had increased by 4x to 5x “in every valuation round historically.” He added that Kredivo now drives 3% to 4% of total gross merchandise value (GMV) for its top e-commerce merchants in Indonesia, compared to 15% to 20% from credit cards.
Kredivo, which started business in Indonesia in 2016, is a BNPL specialist that operates in Indonesia and Vietnam. The company gives customers instant credit financing for e-commerce, offline purchases and personal loans based on real-time decision-making through its brands Kredivo and KrediFazz. Krom Bank Indonesia is the group’s bank entity and operator of the soon-to-be-launched Indonesian neobank, Krom.
Bolttech – US$246 million, Series B, Singapore
Singaporean insurtech startup Bolttech raised a total of US$246 million in its Series B funding round comprising three tranches secured in October 2022, May 2023 and September 2023. The company claims that the sum represents the largest ever Series B round for an insurtech in the country.
Bolttech said it would use the proceeds of the Series B to further fuel its organic growth, including investments in proprietary technology, digital capabilities for business partners and end consumers, as well as talent across its 30+ markets. It will also deploy the capital to support its global growth strategy, with a focus on emerging markets, and expand its technology-enabled ecosystem for protection and insurance for emerging consumers.
Bolttech is one of the world’s leading embedded insurance providers. The business-to-business-to-consumer (B2B2C) insurtech connects tailored and affordable insurance products to consumers via partner platforms in more than 30 markets across three continents. Bolttech serves a wide range of customers, including more than two million emerging consumers, especially with its device protection offerings.
Bolttech has licenses to operate throughout Asia, Europe and all 50 US states, and claims it quotes approximately US$55 billion worth of annualized premiums. Globally, the startup’s ecosystem comprises 700 distribution partners with more than 230 insurance providers and offers in excess of 6,000 product variations.
Investree – US$231 million, Series D, Indonesia
Indonesian peer-to-peer (P2P) lending platform Investree raised US$231 million in a Series D funding round led by JTA International Holding in Qatar, with participation from Japanese financial conglomerate SBI Holdings. The company said it would use the proceeds to expand its product offerings, strengthen partnerships with diverse collaborators and enhance its suite of innovative digital solutions tailored to the specific needs of micro, small and medium-sized enterprises (MSMEs).
As part of the deal, Investree and JTA have also established a joint venture in Doha to serve as a hub for Investree’s Middle Eastern operations and provide digital lending services for SMEs in the region.
Founded in 2015, Investree is a Jakarta-based alternative finance player. The company says it has disbursed IDR 14 trillion (US$900 million) worth of loans in Indonesia. The majority of these loans were disbursed to partners of agritech startup unicorn EFishery and Gayatri Microfinance. Besides Indonesia, Investree also operates in Thailand and the Philippines.
Perfios – US$229 million, Series D, India
Indian software-as-a-service (SaaS) fintech company Perfios secured in September a US$229 million Series D funding round from Kedaara Capital. The round comprises a combination of a primary fundraise and a secondary sale, the startup said in a statement. Perfios said it would use the proceeds to fuel its continued global expansion plans in North America and Europe, and invest in new technologies to enhance its comprehensive stack of SaaS products.
The round came on the heels of Perfios turning profitable, with revenue from operations spiking three-fold in the fiscal year ending March 2023, according to consolidated financial statements seen and analyzed by Entrackr. The company is now reportedly preparing for an initial public offering (IPO) and targets a listing in 2024.
Founded in 2008, Perfios is a global B2B SaaS company serving the banking, financial services and insurance industry in 18 countries. The company, which claims more than 1,000 customers, provides a comprehensive suite of services for financial institutions, encompassing income analysis, fraud checks, verification, and automated customer onboarding. These services cater to various sectors such as consumer lending, SME lending and wealth management.
Perfios claims it processes 1.7 billion transactions a year with assets under management (AUM) of US$36 billion.
KreditBee — US$200 million, Series D, India
Indian credit fintech startup KreditBee raised a total of US$200 million in Series D funding comprising two tranches secured in December 2022 and January 2023. KreditBee did not disclose its valuation but a person aware of the matter told the Economic Times that it stands at around US$680 million.
The company said it would use the proceeds to scale its business and diversify its product offering by venturing into digitally-enabled financial products. It is also planning to use the capital to diversify its product portfolio into SME lending, as well as to provide motor and vehicle loans.
Founded in 2018, KreditBee is a platform facilitating loan transactions between borrowers and financial institutions. The startup provides personal finance products through its own non-banking financial company (NBFC) entity, Krazybee Services, along with partnerships with over 10 financial institutions. KreditBee claims it serves 10 million customers across India.
Featured image credit: edited from freepik