Huge 77% drop in South Korean FinTech deal activity drags East Asian investment down in Q1

Key East Asian FinTech investment stats in Q1 2023:

• East Asian FinTech deal activity reached 61 transactions in Q1 2023, a 54% drop from the same period last year

• Combined investment raised by East Asian FinTech companies in Q1 2023 reached $139m, a 90% drop YoY

• China surpassed South Korea as the most active FinTech country in East Asia with 25 deals

In Q1 2023, the total number of FinTech deals in East Asia reached 61, reflecting a significant 54% decline compared to the same period in 2022. In the first quarter of 2023, FinTech companies in East Asia witnessed a significant decline in combined investment, plummeting by 90% compared to the previous year, with the total amount raised reaching $139m.

Funds, a venture debt/debt financing company, was the largest East Asian FinTech deal in Q1 2023 after raising $27m (JPY 3.4bn) in their latest Series D funding round, led by Anri. Currently, Funds’ registered user base has reached 73,000, surpassing 280 public funds, and the cumulative amount raised has exceeded 30 billion yen. In terms of fundraising accomplishments, Money Forward Co., Ltd. has successfully launched the “Money Forward Fund ME Fund #1” and fully achieved its target of soliciting 1 billion yen through an application-based approach. Among the growth-oriented startups aiming to become publicly traded companies, Gojo & Company Co., Ltd., operating in the microfinance sector, has raised a cumulative total of 1.3 billion yen as of the end of February 2023, providing direct debt to fulfil the capital requirements for their growth.

China was the most active East Asian FinTech country in Q1 2023 with 25 deals, a 41% share of total deals in the region. South Korea was second with 18 deals and Japan was third with 12 deals. Interestingly South Korea was the most active East Asian FinTech country in Q1 2022 with a 58% share in the region. South Korean FinTech deal activity dropped 77% YoY during the first three months of 2023.