Total funding into Indonesian FinTech startups fell 51 percent to $765 million in 2023, from $1.6 billion in 2022, Tracxn Technologies Ltd. said Tuesday.

Tracxn said in its “Tracxn Geo Annual Report: Indonesia FinTech 2023” that the Indonesian startup ecosystem is the second highest-funded startup ecosystem in the Southeast Asian (SEA) region in terms of overall funding and also the second largest economy in the SEA region.

However, it said the funding in the Indonesian FinTech space in 2023 has fallen by when compared with 2022, as investors are still taking cautious steps due to the global macroeconomic slowdown and other geopolitical issues.

According to the statement, seed-stage funding stood at $9.5 million in 2023, a plunge of 84 percent compared with the funds raised in the previous year.

Meanwhile, early-stage funding fell 79 percent to $99.4 million in 2023 from $466 million in 2022.

Companies in this space secured late-stage funding worth $656 million in 2023, marking a 40 percent decrease from $1.1 billion in 2022.

In terms of quarter-wise comparison, there was a decline in funding in the second and third quarters of 2023, but there was an uptick in the fourth quarter of 2023.

Funding worth $312 million and $407 million was observed in the first quarter and the fourth quarter of 2023 respectively.

However, the second quarter and the third quarter of 2023 witnessed only $25.5 million and $21 million respectively.

The Indonesian FinTech space saw three $100 million+ funding rounds in 2023, as against four such funding rounds in 2022 and six rounds in 2021.

Investree, GoJek & Kredvio were the companies that attracted funding above $100 million in 2023.

Further, no new unicorns emerged from this space in 2023.

Alternative Lending, Payments, and Banking Tech were the top-performing segments based on funding during the year.

Alternative Lending companies attracted investments worth $554 million in 2023, 82 percent higher than the $305 million raised in 2022.

The payments segment secured total funding of $217 million in 2023, a 67 percent drop when compared with the $659 million raised in 2022.

The banking tech space witnessed a total of $8.5 million, an 81 percent drop compared to $44.2 million raised in 2022.

The overall Indonesian FinTech sector witnessed four acquisitions in 2023, similar to the scenario in 2022, but slightly lower than the five acquisitions recorded in 2021.

HomeCredit, an alternative lending company, was acquired for $219 million by Krungsri, Adira Finance and MUFG.

East Ventures, Mandiri Capital Indonesia & AC Ventures were the overall most active Investors till date in the Indonesian FinTech sector.

500 Global, Hustle Fund & Mandiri Capital Indonesia were the top investors in the seed stage in 2023, while Gobi Partners, Alpha Trio & Openspace Ventures were the most active early-stage investors.

Tracxn is a data intelligence platform for private market research, tracking 2.3 million entities through 2500+ feeds categorized across industries, sub-sectors, geographies, and networks globally.

Tracxn : Total funding into SEA FinTech startups plunge 65 percent to $2B in 2023