Q3 APAC Fintech Funding Hints at Nascent Recovery

The first three quarters of 2020 saw APAC fintechs raise a combined $3.9 billion, down 46% compared to the same period last year, while deal volume fell by 20.5% to 318, according to the latest Q3 APAC Fintech Funding Report published by S&P Global Market Intelligence.

Key takeaways from the report include:

  • In the third quarter, fintechs in APAC raised $1.3 billion, 8.7% lower than the previous quarter. Year-to-date capital flows into APAC fintechs, however, appear to have hit a trough in June. Both monthly funding volume and value have since risen, possibly signaling a cautious return of investor interest.
  • Investors remain open to new investments and early-stage fintechs amid subdued funding climate. Over the first three quarters this year, at least 15 out of 23 large APAC fintech funding rounds with transaction size of $50 million and above still saw participation from new investors, two-thirds of which are in series B or prior.
  • In the third quarter, China saw a resurgence in private fintech investments and garnered the most fintech funding value. Deal counts by Chinese fintechs doubled to 20, while venture capital flows surged by more than tenfold to $425 million. Southeast Asia, however, saw the most fintech funding activity, which is in line with our earlier observation that investors are increasingly eyeing opportunities in the region.
  • Payment companies continue to lead APAC fintech funding in the third quarter but insurtech was the only category, out of the six fintech industry segments tracked by S&P Global Market Intelligence, that saw an increase in both funding value and volume.

Launching Growjek – ASEAN Tech, Digital, Startup & VC Newsletter

A quick note to readers of this site, I’ve started a biweekly email newsletter called Growjek.

Link to the latest issue here.

Sign up if you’re interested in a digest of ASEAN (with an Indonesia focus) tech, digital, startups, VC, internet, fintech, gaming, ecommerce, adtech and lots of other stuff related to the ‘new economy’ every other Friday.

There are already 124 other people on the list, so you’re in good company.

The Growjek thesis is this:

  1. ASEAN is the biggest and most exciting multi-decade growth and investment opportunity in the world right now — driven by ‘new economy’ tech
  2. Indonesia is — by size alone — the natural centre of gravity for ASEAN (sorry Singapore, but you have a crucial role to play as THE open-source regional aggregator platform!)
  3. ‘New economy’ investment and innovation flows first into ASEAN, and by extension Indonesia, but increasingly in the years (and decades) ahead out of Indonesia and across ASEAN

The Growjek newsletter will be more VC and investment focused than Digital in Asia, which covers a broader region, and a wider range of topics.

Enjoy!

Brand Safety and Influencer Marketing Overview

Influencer marketing is already a huge marketing channel, but it’s estimated that fraud eats up 15% of influencer ad spend. Costing the industry USD $1.3 billion annually, over 684 million fake accounts have been removed from Facebook, Twitter, Instagram and Linkedln since 2014.

In APAC, there are approximately 58 million fake users with India and Indonesia making up the largest pieces of the pie. Up from 30% in 2019, 34% of marketers now perceive brand safety as an on-going influencer marketing concern.

This report from INCA looks at brand safety challenges and consumer data in influencer marketing.

Gaming and Esports Spotlight on Indonesia

Indonesia is a dynamic market for mobile games and esports, especially given its ever-increasing rate of internet and smartphone users.

With an online population size of 171 million, favourable demographics with 60% of the population aged between 15-54, and a government that supports the development of gaming and esports, Indonesia is an emerging gaming powerhouse.

This spotlight report from Niko covers the detail.

The Game-Streaming Market in China

China’s streaming ecosystem is a far cry from what’s going on in the West, in terms of content, monetization, and how the audience interacts with the content.

While platforms such as Twitch and YouTube generate the majority of their revenues through subscriptions, China’s biggest platforms, including YY Live, Huya, and Douyu, predominantly make money from user donations to streamers.

China is a mobile-first country and this is reflected in its game-streaming market. The collective nature of traditional Chinese culture also means that its viewers engage with content differently to Western viewers. Interactions between viewers and the streamers are far more prominent in China, thanks to innovative platform features such as bullet chats.

Chinese streaming platforms are also generally less toxic toward women, as gender balance is very important in Chinese culture. In fact, there is less toxicity all round, as gaming and streaming are considered social activities in China

This report from NewZoo looks at the game-streaming market in China in detail.

The State Of Influencer Marketing in APAC

The influencer marketing space has heated up over the past few years, across Asia Pacific with platforms and resources readily available to both marketers and influencers.

Driven by strong market advancement, digitalization and capable industry players, influencer marketing has gone from strength to strength in Asia, and has become a part of most marketer’s arsenals today.

This new influencer marketing report from CastingAsia leverages data points from over 170,000 influencers and over 1,300 influencer marketing campaigns conducted across Asia over the past year.

How to Reach Asian Consumers During Ramadan

There are 240 million Muslims in Southeast Asia and 600 million Muslims in South Asia, representing a $2.2 trillion dollar market, and with Ramadan just around the corner, brands are racing to stand out in the busiest season of the year.

Digital platform ADA have put together some useful research covering how marketers can reach consumers during this period.

Ramadan Digital Trends 2020 [PDF]

A few key Ramadan trends for marketers in Southeast Asia and South Asia:

  • Travel to hometowns is common – but travel patterns may differ by country.
  • Visits to mosques, prayer rooms and cemeteries shift.
  • The usage of religious apps fluctuates.
  • Muslims start eating out less.
  • Last minute buying of big-ticket items.
  • Muslims are searching for different content at different times

 

Myanmar Digital Landscape 2020

Digital marketing in Myanmar has grown and changed at a startling rate in 2019, and this is set to continue in to 2020.

With the fastest mobile data speeds in APAC behind Singapore and 90% smartphone penetration, mobile marketing is fast becoming the priority for all advertisers.

Local marketing tech platform Humology have produced a trends deck covering digital.

Programmatic, mobile, video, native and digital advertising are all highlighted as growth areas.

The Future of Digital Identity

Digital identity in the future looks very different to how we understand it right now. And that change will be driven not by privacy regulations, or the death of the cookie, but by the rise of the Internet of Things (IOT).

The idea of one or two personal devices giving us access to individual consumers will disappear, to be replaced with a range of potential devices – from mobile to voice-activated speakers to connected TV to fridges.

Across those devices a range of different digital identities will exist – some individual (like now), some family/household, some work/B2B, and some more generic.

The big idea that’s dominated the internet era so far, that digital marketing is all about one-to-one addressability and tracking, will be exploded and replaced with a spectrum of targeting and measurement options across different identities, devices and channels.

It’s a paradigm shift – and it’s why the idea the cookie is crumbling as the web shuts down consumer tracking, isn’t actually that big a deal. The medium-to-long term view of how we deliver and measure marketing in an increasingly automated and digital world looks very different, whatever happens to cookie based targeting right now.

Digital, Tech, Marketing & Start-Ups in Asia