Fintech investment in the Asia-Pacific region plummeted to the lowest level since 2014: US$11.6 billion. COVID-19 drove a lot of investment away from emerging markets like Southeast Asia, particularly in the second half of the year.
One light in 2020 was corporate-affiliated investment, which fell only somewhat to US$7 billion year-over-year, in part due to corporates looking to accelerate their digital transformation efforts in the face of COVID-19.
The payments space was the most resilient fintech sector in the Asia-Pacific region; during H2’20, Australia-based B2B payments company eNett was acquired by US-based WEX for US$577 million, Australia-based digital bank Judo Bank raised US$209 million, South Korea-based money transfer company Toss raised US$147 million, and India-based payments company Razorpay raised US$100 million.
Across much of the Asia-Pacific region, early stage companies continued to struggle to attract funding, causing many to enhance their focus on achieving profitability and on conserving cash.
Southeast Asia, which attracted significant fintech investment in recent quarters such as the $3 billion raise by platform company Gojek in H1’20, stalled in H2’20 as investors turned quickly to more developed markets and to proven companies with business models expected to outlast the pandemic.
While the Ant Financial dual-IPO was cancelled prior to listing, there is still strong interest among Asia-Pacific based fintech unicorns in IPOs given the successes and valuations achieved by unicorn companies recently.