tl;dr
In Q1 2025, Southeast Asia (SEA) fintech startup funding dropped 66% year-on-year to $193 million, marking the fifth consecutive quarterly decline, mainly due to global economic challenges and investor caution. However, the overall SEA tech sector grew 30% to $909 million, boosted by a $600 million ...
In Q1 2025, Southeast Asia's fintech startup funding plunged by 66% year-on-year to $193 million, marking the fifth consecutive quarterly decline due to global economic uncertainty and investor caution. However, the broader Southeast Asia tech sector grew 30% to $909 million, largely propelled by Singapore’s Digital Edge raising $600 million.
Virtual asset service providers (VASPs) led the fintech funding charge with $97.5 million raised, highlighted by Sygnum’s $58 million Series C round, which crowned it the only new fintech unicorn globally that quarter. Singapore dominated fintech investments, attracting 74% of the region's capital, with notable rounds also going to VOOX Exchange ($50 million) and 129knots ($10 million).
Meanwhile, in Japan, a government initiative aimed at promoting digital salary payments has struggled significantly, with less than 3% uptake two years after its launch. Cultural preferences for cash, an ageing population, and company resistance keep physical currency prevalent, with 60% of transactions still in cash. However, some companies with younger workforces, such as Yoshinoya, have started offering digital salary options to improve employee retention.
This contrast highlights the varying pace of fintech adoption across Asia, with Singapore spearheading innovation and funding inflows, while Japan wrestles with ingrained cash habits despite government efforts to digitize payments.