Investors have pumped up record amounts in Southeast Asian financial technology companies this year as locked consumers switched to mobile payment and banking applications.
According to data from the analysis group Refinitiv, there were 80 fintech transactions worth $ 3 billion in 2021 – more than in 2020 and 2019 combined.
“The fintech space started this year, and not just fundraising,” said Rohit Sipahimalani, chief investment strategist at Temasek, the Singapore state-backed company. “Many more businesses are maturing and gaining momentum.”
Mynt, the Philippine e-wallet company backed by China’s Ant Group and Global Telecom, a unit of local conglomerate Ayala, closed a $ 300 million financing round this month at a valuation of more than $ 2 billion.
Singapore’s FinAccel, the parent group of Indonesia’s buy-now-pay-later platform Kredivo, will be announced in the US early next year after agreeing to merge with a $ 2 blank check vehicle. 5 billion.
FinAccel CEO Akshay Garg said the local funding boom was driven in part by investors seeking alternatives to China as Beijing struck the technology sector. “Southeast Asia is one of the beneficiaries of the slowdown in China while there is still a lot of capital available,” he added.
Strong consumer demand has also enabled many fintechs to quickly become profitable, which has contributed to the lure for investors.
Mint’s registered users doubled to 51 million during the pandemic – almost half the population of the Philippines – and the company announced its first positive revenue in June.
Philippines has traditionally relied on local saris, or mom-and-pop stores to charge their phones with credit and do other prepaid transactions.
Only about a third of adults in the country have money in a bank, which makes them rely on informal lenders, but smartphone ownership is high, said Martha Sazon, Mynt’s CEO.
“What we are trying to do is to really invade rural areas in different provinces.”
Through its GCash platform, the company offers everything from loans and payments to digital insurance and investment funds. “We have communications material that says ‘Rather than buying milk tea, buy a fund that Google, Apple and Microsoft carry,'” Sazon said.
Singapore-based 2C2P is another regional company that wants to raise funds after building a business to process secure online payments for retailers and other organizations.
The company was launched in Bangkok in 2003 and offered a business-to-business online payment security system for banks and is now used by almost all of Thailand’s lenders, Singapore’s UOB, and BDO in the Philippines.
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Since moving to Singapore in 2008, the business has evolved into a so-called payment gateway, enabling merchants to pay for goods and services in a number of formats. For example, a customer who buys something from the e-commerce company Lazada can get a payment code at the checkout and pay by credit or debit card, via a mobile banking application or at a local convenience store.
“We set up offices in all the countries, get a license from regulators, and connect to all the payment operations in each country,” said Aung Kyaw Moe, CEO of 2C2P. The company hopes to launch an initial public offering within three years, he added.
New offers by fintech companies are also driving new retail investments in local investors’ capital markets, Temasek’s Sipahimalani said. “In Thailand, the number of retail brokerage accounts has increased by more than a million in the past year,” he said.