Venture funding for Southeast Asia’s fintech sector fell sharply in the first quarter of 2025, with total investment down 66% year-on-year, according to data from market intelligence platform Tracxn. The steep decline highlights growing investor caution amid economic uncertainty, rising interest rates, and ongoing geopolitical risks.
As reported by Tracxn, fintech startups in the region raised just $229 million in Q1 2025, compared to $667 million during the same period last year. The number of funding rounds also decreased significantly, dropping from 74 deals in Q1 2024 to just 43 in the latest quarter. The report attributes the decline to macroeconomic headwinds and a global slowdown in venture capital deployment, especially in risk-sensitive sectors like fintech.
Despite the overall slowdown, a few standout deals were recorded. The top three funding rounds came from Malaysia-based AiraPay, Singapore’s WealthTech firm Helix, and Indonesian payments platform QuickSend. These exceptions, however, were not enough to offset the broader funding slump across the ecosystem.
According to analysts, investor sentiment in the region remains cautious, with many funds opting to prioritize follow-on investments in existing portfolio companies rather than committing capital to new ventures. Early-stage funding has been particularly affected, while later-stage rounds are seeing increased scrutiny and valuation pressure.
The slowdown in fintech investment mirrors a wider global trend, with many investors waiting for clearer signals on interest rate trajectories and economic recovery. In Southeast Asia, concerns over regulatory environments and the sustainability of business models have further compounded hesitancy.
Nevertheless, Tracxn notes that the region continues to hold long-term promise, driven by rapid digital adoption, a large unbanked population, and strong government support for innovation. While the current dip may reflect short-term volatility, industry observers expect investment activity to rebound gradually as market conditions stabilize.
