With increasing investments and research centers established for the development of fintech, countries in Southeast Asia including Singapore, the Philippines, and Thailand are seeing increasing interests in the blockchain technology and alternative non-bank fintech solutions.
According to a report published by TechCrunch, data released by Dymon Asia Capital, Tech in Asia, DMP, PwC, Dealstreet Asia demonstrates that nearly 21.6% of total venture capital funding in Southeast Asia in 2015 and the first half 2016 were granted to fintech startups. That is, nearly US$345 million invested in fintech startups in Southeast Asia alone.
To breakdown the trends in the Southeast Asian fintech market, it is important to recognize six main categories; credit, asset & wealth, insurance, payments, lead generation, and blockchain.
As speculated, payments and lead generation led the fintech market, securing nearly 78% of all venture capital funding over the past 18 months. The rising demand for payment networks and non-bank solutions are evident in many developing countries as well as regions with advanced banking systems because of people’s preference of low-cost and efficient third party transaction settlement services.
The rest of the investment was divided amongst credit, asset & wealth, insurance, and blockchain startups. Asset & wealth recorded an estimated US$50.6 million in total funding, securing nearly 10 times of the total investments startups in the blockchain categories obtained.
Although the data provided by TechCrunch and other leading market analysts show that the current trend in the Southeast Asian market dominantly follows payment and lead generation startups, it also demonstrates the growing presence of blockchain startups and its market in the financial industry.
Critically, payment, lead generation, and asset management markets have been in development for substantially longer periods of time compared to the blockchain market. With that said, blockchain startups are already beginning to secure and establish its position in the rapidly growing Southeastern Asian market, competing against various markets that have dominantly controlled the fintech industry over the past decade or more.
Joseph is a web developer and designer, writer and a passionate musician who loves to travel often. He’s worked as a researcher for a number of venture capital firms and as a freelancer designer for resorts and corporations in Korea and the Philippines. Joseph will be covering new technologies, startups, technical analysis and breaking news in the bitcoin industry.