Southeast Asia and South Asia see 83% decline in fintech startups; investors choose risk-averse strategies

by James · February 23, 2023

The countries of South and Southeast Asia experienced an 83 percent year-on-year decline in new fintechs in 2022, with only 349 startups emerging in the region, Robocash Group says.

The analytical center said in a statement on Friday that the volume of investments, however, has not decreased as dramatically, with investors opting for less risky strategies.

According to the statement, the fintech startups were able to raise around $153 million via various funding rounds.

This is 1.4 percent of the total attracted investments in fintech in this region.

Meanwhile, the payments and remittances sector accounted for the largest number of new companies in SEA & SA – 72 (20.6 percent of the total), mainly concentrated in India.

Meanwhile, blockchain and crypto and exchange-traded assets contained 47 companies each (13.5 percent), most of which were based in Singapore.

In the end, there were 38 new alternative loan companies (10.9 per cent).

However, the total amount raised by all fintech companies in the region dropped to $12.7 billion, down 38.6 percent compared to 2021.

Robocash Group analysts cited the lack of public information as the reason, as investment aggregators continue to add new company profiles.

Still, it is unlikely that the missing data will make a significant difference to the total view for 2022, especially compared to the previous year, it said.

“The decline in the number of new fintechs largely exceeds the reduction in the volume of investment attraction. Investors are choosing less risky strategies, wary of the coming worldwide recession,

“The market is being cleaned up, leaving room for only the most sustainable fintech companies,” said the analysts at Robocash Group.

Assuming the current decade-long trend holds, the number of new companies could grow by 21.6 percent in 2023 from today’s 349 to 425.

At the same time, the attraction of funds for all fintech companies may reach 13.2 billion dollars.

Robocash Group is a group of companies that provide fintech services in Asia and Europe.

The group was founded in 2013 and focuses on offering technological financing solutions for those underserved by the traditional banking system.

All products in the group are built entirely in-house using artificial intelligence, machine learning and data-driven technologies to provide precise and comprehensive risk management, comfort and speed for customers and efficiency for business.