SEA fintech sector hits funding slump in H1 23, but insurtech holds up

2023 has not been kind to Southeast Asia’s fintech startups.

Funding nosedived in the first half of the year compared to the same period in 2022, although certain industry segments were still able to pull in capital.

The share of pre-series A deals fell, while fintech firms in Singapore and Indonesia continued to account for the bulk of investments.

Deal volumes and value are down

According to Tech in Asia data, deal volumes in H1 2023 were down by over 50% year on year.

While the US Federal Reserve first started hiking interest rates in March 2022, deal activity in H1 2022 actually rose. However, that slowed down in the second half of last year, and this trend has continued into 2023.

The difference is even more stark when we look at the deal value. Amounts raised by Southeast Asian fintech startups in H1 2023 plunged by over 80% from H1 2022 levels.

Insurtech and digital banks raking in the dough

However, the situation has not been uniformly bleak, with certain subsectors still attracting investor attention.

One such area was insurtech, which continued to see some large deals being made. Singapore-based Bolttech, for instance, landed US$196 million in a series B round in May, valuing the company at US$1.6 billion.

See also: The rise of enigmatic insurtech unicorn Bolttech

This investment was led by Japanese insurance giant Tokio Marine, with other heavy-hitting investors such as US insurance major MetLife and Malaysia’s sovereign wealth fund Khazanah Nasional.

Other insurtech players that secured significant amounts include Thailand’s Roojai, which received US$42 million in funding in its series B round, and Malaysia’s PolicyStreet, which bagged US$15 million from investors including Khazanah.

Other insurtech startups that got funding were Malaysia’s Ouch! as well as Indonesia’s Qoala and Bang Jamin.

It’s not just the insurtech segment that raised big money.

Digital banks, or startups that are engaged in bank-like activities such as lending, also got investors to write big checks.

In Singapore, ANEXT Bank – one of the four holders of digital bank licenses issued by the Monetary Authority of Singapore – received an additional infusion of US$188 million from parent company Ant Group in March.

Sign of the times

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