Levels are down a quarter and well off the all-time peak hit in 2021.
The geopolitical conflict between the US and China and the strong dollar are possibly taking a toll on the region's fintech investments, a Tracxn semi-annual report released on Friday indicates.
The private market research company revealed that funding for startups in Southeast Asia is down by a quarter in the first half of 2024 at $899 million, which is a fraction of the record high of $6 billion achieved in the latter part of 2021.
Singapore Leads
The decline was driven by falls in seed and late-stage investments, the former being off by more than a half and the latter declining 47 percent. Despite that, early-stage funding was a bright spot, rising 17 percent.
Investment tech, alternative lending, and banking tech were the top-performing segments. In terms of overall funding, Singapore took the lead and accounted for more than half of all investments, followed in a distant second and third by Bangkok and Jakarta respectively.
No AI
«Despite certain challenges, significant optimism exists for this region's long-term growth. Factors such as the young population, large consumer base, reliance on informal financial and commercial systems, and government initiatives are expected to accelerate growth in this region,» Tracxn stated.
But there is probably an additional reason - the need for more generative AI startups in the region. The boom in large language models worldwide in uses and equity markets worldwide has likely taken everyone by surprise.
