SINGAPORE: Singapore raised US$4.6 billion ($6.1 billion) in tech funding last year, the highest amount raised among Southeast Asian countries. Singapore ranks eighth in the world and third in Asia.

The United States tops the list of counties with top tech funding in 2023, followed by the United Kingdom, China, India, Germany, France, and Canada in second to seventh places.

However, capital market company Tracxn Technologies said that overall, the tech sector in Southeast Asia saw a 65 per cent plunge from 2022 to 2023.

Other regions have seen a similar drop in funding, with Germany alone, for example, seeing a 31 per cent decrease in tech funding in 2023.

Early and late-stage funding, as well as seed-stage investments, all saw a significant decline.

However, last year’s bright spots among the different sectors in South East Asia’s start-up ecosystem were fintech, enterprise applications, and retail.

Given South East Asia’s large underbanked population, Tracxn has underlined the importance of fintech firms in the region.

Financial services, therefore, are among the top needs, and governments have pushed for digital transactions. Singapore was also the top city in Southeast Asia for tech funding.

According to Tracxn, the SEA region has a huge underbanked population, making FinTech firms very important to provide financial services in the region, and since the COVID-19 pandemic, governments across the region have been promoting digital transactions.

The four cities with the highest tech funding have been Singapore, Jakarta, Bandung, and Petaling Jaya, with East Ventures, 500 Global, and Wavemaker Partners being the most active investors last year.

“Increased inflation poses a challenge for the SEA region, still there is considerable optimism regarding its long-term growth, as the region has a large consumer base made up largely of young people as well as a dependence on informal financial and commercial systems, which presents a large untapped market for investors and entrepreneurs,” said Tracxn.

Among the top five tech companies listed by Tracxn, three are Singaporean: Grab, Lazada, and HealthifyMe. The other two—Gojek and Traveloka—are Indonesian companies based in Jakarta.

The Singapore Business Review recently noted that Chinese fast fashion retailer Shein, headquartered in Singapore, raised US$2 billion ($2.7 billion) in a funding round last year. /TISG

Read also: IMF Managing Director calls SG a ‘beacon of innovation’ where ‘fintech flourishes’

Interestingly, Grab and Gojek are also listed by Tracxn as top investors in the region.