Indian fintechs drew 42 per cent of the funding value raised by Asia Pacific fintechs in the first quarter of 2022, said a new report by S&P Global Market Intelligence. “Geographically, India-based fintechs continued to dominate funding in APAC, accounting for 42 per cent and 34 per cent of total deal value and volume, respectively, in the region,” the report said.

Fintech companies in South East Asia were the second largest fund raisers amongst APAC fintechs in the period. Overall fintech companies based in Asia-Pacific raised $3.33 billion over 186 deals in the first quarter of 2022, surpassing previous deal values and volumes observed in the March quarter over the past three years.

Compared to the first quarter of 2021, the figure reflects a 44 per cent increase in deal value and 23 per cent growth in deal volume. “However, compared to the previous quarter, the first quarter funding levels represent a 26 per cent decline in dollar amount raised and a 9.7 per cent dip in the number of deals,” the report said.

A decline in funding activity?

Digital lenders topped all other fintech categories with $1.28 billion raised across 52 deals. The agency warned that it expects to see a decline in funding activity in the coming months but mature fintechs, which seem to remain attractive to venture capitalists, may help offset some of the decline in funding levels.

Celeste Goh, Research Analyst at S&P Global Market Intelligence, said that while the year-over-year record-high funding levels in the first quarter seemingly paint a rosy picture of the fundraising environment for Asia-Pacific fintechs, the decline in funding value and volume on a sequential basis signal otherwise and is perhaps more indicative of what lies ahead.

“Fintech fundraising activity could see a further slowdown in subsequent periods in wake of an underwhelming public equity market and further rate hikes,” Goh noted.

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