Fintech and ecommerce lead the way in SEA’s turbulent tech year

2023 was overall a downer for Southeast Asian startups and the broader tech sector.

Across tech startups in the region, the number of fundraising deals last year was down 39% from 2022, while the value of deals declined by 42%, data compiled by Tech in Asia shows. Deal value in 2023 was only 29% of the highs reached in 2021.

However, there are reasons to believe that 2024 will be a better year for the region’s tech scene. But a recovery may only take place in the second half, and this rising tide may lift just some boats, according to industry experts.

Fintech on top, but more room for the rest

Like 2022, fintech and ecommerce emerged as the top two sectors by deal volume in 2023.

However, their combined share declined slightly, from 40% to 38%. Meanwhile, verticals such as health and biotech, clean tech and food tech, as well as the AI, big data, and cloud computing sector grew in their share of overall funding.

Within fintech, lenders and insurtech firms attracted the highest amount of funding.

Digital banks ANEXT Bank, MariBank, and GXS Bank – the digital banking arms of tech giants Ant Financial, Sea, and Grab and Singtel, respectively – drew a combined US$521 million in investments from their parent firms as they ramped up operations in the region.

Also pulling in nine-digit figures each were startups like Amartha and Kredivo, companies that assist in lending to individuals and small businesses.

Meanwhile, insurtech players like Roojai and Bolttech raised eight and nine-digit rounds, respectively. And Japan’s Sumitomo Life, a substantial shareholder of Singlife, said that it would offer to purchase all the shares in Singlife that it did not already own.

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In ecommerce, one of the largest capital infusions came from Alibaba, which poured a total of over US$1.8 billion into Lazada in 2023. That’s unsurprising, as the battle for the wallets of Southeast Asian consumers has heated up once again.

See also: How the TikTok-GoTo deal could shake up ecommerce in SEA

Interest in telehealth also remained strong, with Indonesia’s Halodoc and Singapore’s Doctor Anywhere raising US$100 million and US$41 million, respectively.

The Lion City roars

With 51%, startups in Singapore continued to attract the largest share of deals in 2023. This came mostly at the expense of Indonesia, which saw its share of startups that raised capital fall from 35% to 27%.

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