E-payments and P2P lending were the top categories under fintech that attracted the most venture funding in 2020, according to data compiled by DealStreetAsia. These segments drove dealmaking in Singapore and Indonesia, Southeast Asia’s top two markets for private capital transactions, as reflected in the SE Asia Deal Review: Q4 2020.
In a year that saw an acceleration of technology adoption, e-payment players in Southeast Asia attracted around $634 million across 31 deals.
Among the top deals struck during the year was Voyager Innovations’ $120 million funding in April from its existing investors including PLDT, KKR, and Tencent Holdings. Voyager operates the e-payments platform PayMaya Philippines.
Source: DealStreetAsia Research & Analytics
More recently, in November, Indonesian e-payments platform LinkAja raised $100 million in its Series B round led by Grab.
Meanwhile, peer-to-peer (P2P) lending startups secured $142 million across 10 deals, while other fintech lenders raised $50 million in 13 deals.
As a whole, the fintech category saw 125 deals worth $1.26 billion across Southeast Asia.
More than half of the fintech deals were clocked by startups in Singapore – they received as much as $426 million across 63 deals. However, the deal value was markedly lower than in 2019, when fintech investment in Singapore hit $861 million, more than double from the year before.
Source: DealStreetAsia Research & Analytics
To be sure, unicorns in the region continued to be the main draw for investors. The two ride-hailing unicorns – Gojek and Grab – dominated the fundraising landscape, raising $1.65 billion, and $1.06 billion, respectively, during the year.
Overall, in Southeast Asia, there were actually more deals done during 2020 than the year before despite tepid investment sentiments in the second half of the year. In terms of value, startups raised $8.6 billion, which is about 2% lower than the amount secured in 2019.
Going forward, dealmaking is expected to be muted this year amid broader economic uncertainty. However, digital economy-related businesses are expected to continue to garner investor interest.
According to the report by Google, Temasek Holdings and Bain & Co on Southeast Asia’s digital economy, the region is on track to surpass $300 billion in gross merchandise value by 2025. Indeed, as pandemic restrictions kept people indoors, there were some 40 million new internet users last year, pushing GMV to $105 billion.
There are already notable transactions in the fintech sector this month. Grab Financial said it raised $300 million in a Series A round led by South Korea’s Hanwha Asset Management.
Meanwhile, Malaysia-based private equity firm Navis Capital Partners announced an investment in Singapore-headquartered Moneythor, a digital banking software services provider. The investment amount was not disclosed. Volopay, another Singapore startup, too, secured $2.1 million in seed funding in a round led by Tinder founder Justin Mateen.
