Money is still pouring into Southeast Asia’s fintech scene right now — to the extent that some of these firms are now turning their eyes to the Middle East.
While overall tech VC funding has taken a hit this year, it’s still rosy for fintech firms, which are pulling in about $1.4 billion of the $2.8 billion raised by tech firms in Southeast Asia this year, according to an analysis published by data intelligence platform Tracxn on Wednesday.
Fintech funding may have cooled slightly (it was around $2 billion in 2023), but the region’s booming digital economy, paired with its young, tech-hungry population, means the opportunities are still flowing.
“Looking into 2025, we expect fintech to pick up even more momentum,” says Herston Powers, founding managing partner at VC firm 1982 Ventures.
Eyes on the Middle East
That momentum is driving many Southeast Asian fintech companies to make inroads beyond the region.
Take the Middle East, for example. It’s been a hotbed for Singapore-based fintechs this year. StashAway launched a wealth service for high-net-worth individuals in the UAE in September, while payments unicorn Nium expanded earlier in the year, locking in partnerships with companies in Saudi Arabia and the UAE.
Why the interest? The Middle East offers a goldmine of opportunities: a large pool of affluent individuals eager for digital platforms like cross-border payments, smart investment tools, and friendly regulatory environments.
“The Middle East has substantial capital from sovereign wealth funds looking to invest in fintech, creating a fertile ground for Southeast Asian firms to establish a presence and tap into new customer bases,” Josef Jelinek, research director at fintech advisory firm Kapronasia, tells MONIIFY.
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On top of that, compared to saturated markets like Europe or North America, the region offers less competition, making it easier for Southeast Asian companies to gain a foothold.
With supportive policies, strong market demand, and financial backing, the pattern of Southeast Asian fintechs expanding into the Middle East is set to continue into next year and beyond, Jelinek adds.
In the Middle East, founders betting on fintech are also more likely to score VC capital than anyone else, underlining the strong investor appetite for the sector in the region.
Wealth tech is on the rise
Among the various kinds of fintech startups in Southeast Asia, whether its investments, blockchain, P2P, or regulatory technology, one stands out as having serious potential for funding: wealth tech.
Why? There’s a growing demand for easy, accessible financial tools, especially in emerging markets.
Look at Singapore’s Longbridge Group, which raised more than $100 million this year, or digital-asset exchange SDAX, which bagged $50 million in September.
“Wealth tech is democratizing investing, empowering consumers, and catching investor attention,” says Kapronasia’s Jelinek. “With micro-investing and robo-advisory services booming, we see continued growth as they deliver convenience and accessibility people crave.”
In markets like Indonesia, tools like portfolio builders and smart-asset allocation strategies are gaining traction. And while robo-advisors are on the rise, Jeffry Lomanto, founder of wealth-management company Moduit, says that many long-term investors also want human advisors for tailored strategies.
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“Indonesian investors are focusing more on asset allocation and diversification to spread risk and boost returns,” Lomanto tells MONIIFY. “Mutual funds, bonds, and stocks are still favorites for their stability, while crypto and private markets appeal to those with a higher appetite for risk.”
It’s not just wealth tech that’s turning heads. Embedded finance is rising, blending financial services into everyday apps to simplify life. Think the digital full bank licenses awarded in Singapore to superapp Grab and tech giant Sea, which are both listed in the US.
Meanwhile, payment infrastructure firms dealing with open banking and real-time payments are booming across emerging markets. There are OGs like PayPal and Stripe, but also up-and-coming players like Klarna and Wise.
And let’s not forget crypto. As the crypto market rallies in the year’s end, digital-asset infrastructure, tokenization, and institutional-grade platforms are surging across Southeast Asia.
“We expect the winners to keep emerging in embedded finance, payments, and digital assets into 2025,” 1982 Ventures’ Powers says.
So what’s the play?
Sure, fintech might look crowded — but it’s still early days, and there’s A LOT of room to grow.
“The sector is constantly evolving, and the demand for innovative solutions leaves plenty of space for new founders to carve out their niches,” says Jelinek.
He adds that there are many opportunities in promising verticals like wealth tech, DeFi, digital lending, insurtech and payment solutions.
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While traditional banks still hold much of the market, fintech is closing the gap — and quickly. The rise of APIs and open banking has blown open the door for startups to launch financial products faster than ever before.
And with younger, tech-savvy consumers driving demand, fintech startups have an edge. Hyper-personalized solutions for underserved industries or niche demographics? That’s where they can thrive — something the big players often miss.
“We back founders who deeply understand their markets, have bold visions and unstoppable grit,” Powers says. But these businesses need to deliver. Solid unit economics, a clear path to profitability and the ability to scale fast. These are the essentials.
