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FC Market Views
The fintech landscape continues to strive as one of the most invested verticals in 2024. This proves the industry to be quite resilient amidst tech winter due to the ever-evolving demand and development of the fintech world, touching both Web2 and Web3. As the world has shifted to become more global and interconnected, the solutions provided by fintech companies have also become more varied and global-minded.
Recent Trends
Over the course of 2024, fintech continued to lead Southeast Asia's funding landscape, accounting for USD 1.68 billion or 3.68% of the total funding value, even amid a decline in overall venture investments. Statistically, there are several verticals under fintech that led the fundraising trend for 2024. We see that some of these leading verticals might become the catalyst of the development of fintech in the coming years.
Leading the investment trend, in 2024, the payments sector secured USD 366 million in funding, reflecting a 53% increase compared to 2023. One place behind payments, the cryptocurrency industry also attracted investors’ attention, securing USD 325 million in funding, experiencing a 20% rise from the previous year. Understanding these numbers, it is interesting to see how payment solutions can still gain fundraising despite having been a topic that investors discussed for a long time and it is also exciting to understand the recent development and adoption of crypto.
Payment: The Ever-progressing Exchange Medium
Looking at the recently funded deals in payment, we observe that it can mainly divided into B2C and B2B. In payments, a lot of deals seem to have a theme of cross-border payments. We have found that it is mostly driven by:
1. Multi-national CompaniesGlobal companies demand a solution to pay employees in different parts of the world using different currencies
2. Gig EconomyMore and more people are doing side-employments from international companies
3. Trend of Migrant WorkersMigrant workers have a need to send back money to their home country with less hassle
4. Tourism & Short-Term StaySome countries might have different local payment systems that are not globally standardized
To cater to these trends, here are some solutions that we recently observed in the market:
Recently, Web3 solutions have also emerged to become more integrated towards the payment ecosystem, catering to B2C and B2B, to help serve cross-border transaction demands - unified by cryptocurrencies as a medium.
The Disruption of Web3: The New Era of Fintech
While the term Web3 in fintech often evokes cryptocurrency, its influence extends considerably beyond this initial application. From the development of decentralized finance (DeFi) platforms, the implementation of blockchain-based payment solutions, and the advancement of digital verification technologies, Web3—a layer built upon the foundation of Web2—is transforming the fintech landscape by enhancing transparency, security, and efficiency.
The Underlying Technology in Web3
To support the need for enhancement in transparency, security, and efficiency on the Web3 layer, advanced technologies like blockchain serve as the foundational technology to assist new fintech innovations.
Why Are We Heading Towards the Web3 Fintech?
We have long relied on a centralized financial infrastructure, where traditional banks dominate the landscape. While Web2-based fintech companies have addressed some societal finance needs, key challenges persist—leaving room for further innovation. A decentralized ecosystem through Web3 offers the potential for a more efficient and inclusive financial environment.
Understanding the technology and benefits utilized under the Web3 layer, here are notable use cases.
