The Southeast Asia (SEA) InsurTech total funding plunged 61 percent to $193 million in 2024 from $495 million in 2023, in line with global funding downturn across sectors, Tracxn said Friday.

The data intelligence platform for private market research said in its latest report that the SEA InsurTech market has experienced significant fluctuations in funding over the past two years, saw its highest-ever funding in 2023.

This trend aligns with a global funding downturn across sectors, driven by macroeconomic uncertainties, higher inflation, and increased interest rates, creating a more cautious investment landscape, it said.

Beyond financial market challenges, it noted geopolitical factors have added complexity for SEA nations.

Despite these challenges, the region has demonstrated growth and economic adaptability in recent years, it added.

As compared to the total funding of $245.6 million in 2022, the funding in the region also dropped by 21 percent.

According to the report, the region’s seed-stage funding in the sector fell 16 percent to $7.7 million in 2024 from $9.2 million in 2023, while early-stage investments plummeted over 80 percent to $38.5 million in 2024 from $353 million in 2023.

Late-stage funding , however, witnessed an 11 percent uptick to $147 million in 2024, compared with $133 million in 2023.

Meanwhile, the fourth quarter of 2024 saw the maximum investment activity across all quarters, with $105 million raised, accounting for nearly half of the total funding for the year.

Further, the second half of 2024 emerged as the most active funding period, raising $111 million — a 35 percent increase from the first half of 2024 ($82 million) but a 50 percent decline from the second half of 2023 ($231 million).

The report showed Singapore has solidified its position as a global hub for tech startups, ranking as the fourth highest-funded country in FinTech investments in 2024, following the United States, United Kingdom, and India.

Meanwhile, Indonesia and Vietnam are experiencing significant expansion in the manufacturing sector.

Leading global companies have established new manufacturing units in these countries, attracted by competitive labour costs and favorable foreign direct investment (FDI) policies.

These opportunities, coupled with increasing government support, are expected to accelerate economic growth in the region.

The sector saw just one $100 million+ funding round in 2024, as against two in the previous year, said the report.

Bolttech, a provider of insurance-as-a-service solutions, raised $100 million in its Series C funding round, becoming the largest round of the year.

Insurance information technology (IT), internet-first insurance platforms, and employer insurance attracted the highest funding in SEA’s InsurTech sector.

Insurance IT companies secured funding worth $135 million in 2024, 47 percent lower than $256 million in 2023, but an 8 percent uptick from $125 million in 2022.

Funding into internet-first insurance platforms was $51.7 million in 2024, down 78 percent from $236 million in 2023, and a 56 percent decrease from $115 million in 2022.

The employer insurance segment raised $6.5 million in 2024, a drop of 65 percent from $18.5 million in 2023, and a growth of 27 percent from $5 million in 2022.

Notably, no unicorns emerged in the SEA InsurTech sector in 2024, mirroring the trend from 2023.

Acquisition activity in the SEA InsurTech sector also slowed, with only one acquisition recorded in 2024—down from five in 2023 and two in 2022.

Roojai acquired Lifepal, an insurance comparison platform, marking the sector’s only acquisition in 2024.

Singapore continues to lead the funding ecosystem with $135 million raised in 2024, followed by Jakarta ($50.5 million) and Kuala Lumpur ($1.2 million).

Key investors shaping the SEA InsurTech sector in 2024 include Wavemaker Partners, East Ventures, and Openspace Ventures, who are the all-time most active investors.

Y Combinator, Bee Next, Appworks took the lead in seed-stage investments in 2024, while EDBI, Peak XV Partners, KB Investment were the top early-stage investors.

“Despite a sharp downturn in InsurTech funding, Southeast Asia’s resilience, evolving economic landscape, and growing government support provide optimism for future growth,

“The region’s ability to attract major global corporations and maintain its standing as a burgeoning tech hub underscores its potential to boost growth in the region,” said Tracxn.

Tracxn : Southeast Asia’s FinTech funding drops 23 percent in 2024