In Indonesia, fintech continues to dominate equity funding, mirroring a broader Southeast Asian trend driven by rising adoption of digital financial services.

In 2024, Indonesian fintech companies raised a total of US$141 million through 23 deals, accounting for 32% of total equity funding and 27% of deals, according to a recent DealStreetAsia DATA VANTAGE report. This underscore fintech’s rapid expansion and its significant influence on the country’s financial landscape.

The dominance of fintech in the Indonesian investment landscape aligns with increasing adoption of digital financial services. QR payments, in particular, have surged over the past years, growing from IDR 8.2 trillion (US$495 million) in 2020 to IDR 98.5 trillion (US$6 billion) in 2022.

The Boston Consulting Group (BCG) estimates that the payment segment boasted over 60 million active users in 2023 and is expected to grow at a rate of 26% annually between 2020 and 2025. Meanwhile, in the lending space, the number of peer-to-peer (P2P) borrower accounts reached 30 million in 2021, rising at a compound annual growth rate (CAGR) of 50% between 2018 and 2022.

This surge in fintech usage has accelerated financial inclusion, which improved remarkably over the past decade from 49% in 2014 to around 83% in 2023, according to the World Economic Forum.

Fintech funding in Southeast Asia

Fintech funding trends in Indonesia align with the broader Southeast Asian region. In 2024, fintech retained its dominance in regional startup equity funding, contributing US$1.68 billion or 36.8% of total value, up from 20.3% in 2023. This marks a 5.6% increase in funding value, alongside a 9.2% growth in deal volume, which reached 154.

Wealthtech led in both volume and value, securing a total of US$381 million across 52 transactions, followed by fintech lending with US$295 million and 37 transactions, and enterprise fintech solutions with US$33 million and 18 deals.

Meanwhile, e-payment, traditionally among the top three fintech categories in previous years, dropped to fourth place, experiencing a sharp 54% year-on-year (YoY) decline in deal volume to 17 in 2024, despite securing the second largest sum at US$359 million.

Neobanking followed a similar trend, securing only six transactions but the third largest value at US$329 million.

This suggests maturing markets with fewer but larger deals.

E-payment and neobanking secured the top two largest fintech rounds of 2024:

• Tyme Group, a digital banking group, raised a US$250 million Series D in December 2024 to expand its market presence; and
• Ascend Money, a mobile wallet and digital financial services platform from Thailand, closed a US$195 million round in June to expand its digital lending business.

Renewed interest in blockchain

Fintech investment in 2024 was also driven by a renewed interest in blockchain and decentralized finance (DeFi) projects. DeFi accounted for 44% of total fintech deal volume in Southeast Asia in 2024 and 25% of its funding value. This represents a significant leap from just 7% and 5%, respectively, in 2020, and underscores investor’s confidence in blockchain as an underlying infrastructure for fintech innovation.

Interest in blockchain extended beyond fintech last year. In the enterprise software and IT sector, startups integrating blockchain dominated equity funding in 2024, contributing 82% of transactions and 81% of the total funding value in the category. This trend underscores the growing significance of blockchain in driving enterprise innovation, particularly in areas such as supply chain optimization, data security, and decentralized infrastructure.

Notable blockchain-driven software and AI fundraisers in 2024 included Initia Labs’ US$21.5 million seed and Series A rounds; Morph’s US$20.3 million seed and angel rounds; and Edge Matrix Computing’s US$20 million venture round.

VC funding downturn

Despite fintech’s resilience, overall venture capital (VC) funding in Indonesia declined by 65% YoY, dropping from US$1.27 billion in 2023 to US$440 million in 2024. Deal count also fell, decreasing 34% YoY from 128 to 85.

This decline was consistent across Southeast Asia. The region recorded 633 deals in 2024, down 10.3% YoY, while total deal value plummeted 41.7% to US$4.56 billion. This figure represents just 54.6% of the capital raised in 2020 and a mere 19.5% of the 2021 peak, underscoring a profound shift in Southeast Asia’s funding landscape, with startups grappling with tighter capital flows and investors favoring more established ventures.

Amid declining VC investment, only one startup reached unicorn status in 2024: Tyme Group, which achieved a US$1.5 billion valuation following its Series D.

Singapore-headquartered Tyme Group is a digital banking group operating in South Africa and the Philippines. The firm, which serves a combined 15 million customers, aims to expand into Vietnam and Indonesia in 2025.