Financial technology startups based in the Asia Pacific (APAC) region have experienced a decline in venture capital (VC) funding across all stages, contributing to an overall year-on-year (YoY) fall in 2022.

New figures from GlobalData’s Financial Deals database found there were 400 fintech VC funding deals with disclosed funding rounds announced in the APAC region in 2022, with 273 early-stage funding rounds and 127 growth, expansion and late-stage funding rounds.

The volume of early-stage funding rounds saw a YoY drop of 14.4 per cent, while the number of growth, expansion and late-stage funding rounds declined by 12.4 per cent. However, deals going through Series D funding rounds experienced a notable growth in volume.

“The decline in the number of growth, expansion, and late-stage funding rounds in the APAC fintech space is relatively less compared to the decline observed in early-stage rounds,” Aurojyoti Bose, Lead Analyst at GlobalData, said.

“This is noteworthy, as investors are becoming increasingly cautious in the face of volatile market conditions. This is especially relevant given that growth, expansion, and late-stage funding rounds typically involve higher capital investment.

“The APAC fintech space has become increasingly competitive, making it challenging for startups to secure funding. In addition, investors have become more cautious about investing in high-risk ventures, including early-stage fintech startups. As a result, fintech startups must re-evaluate their strategies and search for innovative ways to overcome the funding slump.” 

Early-stage fintech funding rounds also accounted for 68.3 per cent of the APAC VC funding market volume share, while growth, expansion and late-stage VC funding rounds’ share came in at 31.7 per cent.

India also came out on top for the highest number of announced fintech VC deals with disclosed funding rounds, closely followed by Singapore, South Korea, Indonesia, Australia, Japan, China and Hong Kong.