The downfall of the SEA FinTech startup ecosystem can be attributed to rising interest rates, macroeconomic factors and fear of reduced startup valuations.
According to Tracxn Geo, funding for the ecosystem reached its peak in Q4 2021 but has been steadily declining since Q2 2022. In Q3 2023, there was a significant 74% drop in funding compared to the previous year. This quarter marked the lowest funding level since 2020.
The decline in funding can be attributed to various economic factors and the fear of reduced startup valuations. In Q3 2023, SEA FinTech companies raised US$229 million, which is a 48% drop from US$437 million in Q2 2023 and a 74% decline from US$887 million in Q3 2022. The lack of late-stage funding rounds in Q3 2023 also contributed to this drop in funding.
