Apac fintech startups see decline across all VC funding stages in 2022
The Asia Pacific (APAC) region has emerged as a significant hub for startups in the financial technology (fintech) industry in recent years, with increasing numbers of venture capitalists (VCs) investing in the space.
However, the region’s fintech startups are currently facing a funding decline, with all funding stages, including early stage (seed and Series A) and growth, expansion and late stage (Series B and beyond), contributing to the overall decline in 2022, GlobalData reveals , a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that a total of 400 VC funding deals with disclosed funding rounds were announced in the fintech space in the APAC region during 2022. This included 273 early stage funding rounds and 127 growth, expansion and late stage funding rounds. While early-stage funding rounds recorded a year-on-year (YoY) decline of 14.4%, growth, expansion and late-stage funding rounds were down 12.4%.
Aurojyoti Bose, lead analyst at GlobalData, comments: “The decline in the number of growth, expansion and financing rounds in the APAC fintech space is relatively smaller compared to the decline observed in early stage rounds. This is noteworthy, as investors become increasingly cautious in the face of volatile market conditions. This is particularly relevant given that growth, expansion and late-stage financing rounds usually involve higher capital investments.”
Early funding rounds dominated the APAC fintech VC funding landscape in terms of volume, accounting for 68.3% share in 2022, while growth, expansion and late stage VC funding rounds accounted for 31.7%.
Most of the VC funding rounds announced in the APAC fintech space recorded declines in 2022 compared to the previous year. However, Series D funding rounds emerged as a notable exception and witnessed growth in deal volume.
Meanwhile, India witnessed the announcement of the highest number of VC deals with disclosed funding rounds in the fintech space, followed by Singapore, South Korea, Indonesia, Australia, Japan, China and Hong Kong.
Bose concludes: “The APAC fintech space has become increasingly competitive, making it challenging for startups to secure funding. In addition, investors have become more cautious about investing in high-risk ventures, including early-stage fintech startups. As a result, fintech startups must rethink their strategies and search for innovative ways to overcome the funding downturn.”
