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Southeast Asia fintech firms raise US$1.14 billion in January-September

By Asia Asset Management  
November 14, 2019

Southeast Asian financial technology companies raised US$1.14 billion from investors in the nine months through September, sharply up from $679 million in all of 2018, with Singapore and Vietnamese firms accounting for 87% of the total, according to a new report.

Singapore firms drew $581.4 million, or 51%, of fintech funding within the ten-member Association of Southeast Asian Nations or ASEAN region between January and September.

That was up from $359.87 million, or 53%, last year, says the joint report by PricewaterhouseCoopers (PWC), Singapore’s United Overseas Bank (UOB) and the Singapore Fintech Association published on November 12.

According to Janet Young, head of group channels and digitalisation at UOB, Singapore firms attracted the lion’s share of funding because of "favourable regulatory and business environment, strong investor interest and maturing fintech sector" in the city state.

"However, expanding into and within one of the world's most diverse regions is not plain sailing. Therefore, in order to increase their chances of success, it is important for fintech firms to find the right partner to navigate the differing regulatory frameworks and operating landscape across ASEAN," she says in a statement on the report’s findings.

Vietnam firms accounted for $410 million, or 36% of funds raised in January though September, versus $2.72 million or just 0.4% throughout 2018, primarily from fundraising by payment solutions company VNPay and Momo Pay, an e-wallet and payment application firm.

Japan's Softbank Group's Vision Fund and Singapore sovereign wealth fund GIC Pte Ltd invested $300 million in Hanoi-based VNPay in July.

Momo Pay, based in Ho Chi Minh City, raised $100 million from a group of investors led by Warburg Pincus in January.

The report also found that most Southeast Asian fintech firms are confident about their future fundraising.

Some 45% of the 139 firms surveyed across the region are optimistic of raising more than $10 million in their next round of funding, and 40% are confident of drawing between $1 million and $10 million.

This upbeat view isn’t surprising because of the "promise that the ASEAN region brings and the liberalisation of the industry through digital banking licences", according to Wong Wanyi, fintech leader at PwC.

"The increasing penetration of mobile devices coupled with the capabilities of new innovative technologies have made fintech firms a key driver in this evolving ASEAN financial services landscape," Ms. Wong says in the statement.