Tech has been one of the key growth drivers for the South East Asian economy. Even with some downturns in the previous year, 2024 is the year that the region’s tech industry is returning to its usual boom.
The specific sector that seems to be leading this boom is fintech. While the investors may have their eyes on other sectors such as AI and cloud tech, it is fintech that is playing the role of a crucial component behind the scenes.
Sea Inc. is the Best Example
At a glance, it may seem that fintech in South-East Asia is not the grandiose industry it used to be between 2022-22. But, the growth in the digital economy in the region shows a promise unlike any other. While cutting-edge tech may be of interest to larger corporations looking to hire local talent, the growth of fintech is geared towards serving the local population.
Sea Inc., one of the biggest tech conglomerates in South East Asia is betting big on its fintech arm, SeaMoney. In 2024 Q1, Seamoney’s EBITDA hit a 50% growth, reaching $149 million. Fintech for Sea Inc. is not just another segment such as its gaming front Garena, or cab-hailing major Grab. Rather, SeaMoney is something that supports all of its various digital fronts.
Be it Grab, GoTo, Garena, etc.; all of Sea’s digital campaigns rely on SeaMoney to ensure seamless financial services. The company has also been innovating the digital payment system, providing unique offerings to its customers.
This phenomenon is not just true for Sea Inc. but for the whole fintech segment in South-East Asia. Sea Inc. is simply serving as the tide that raises all boats.
There are Dangers to the Situation
With investments starting to surge in SEA fintech, companies are now inflating their valuations. When it comes to long-term profitability, such inflated valuation can be a major hindrance towards investors actually holding on to their promises.
While the growth period exists, it would be wise for the fintech segment to try and find sustainable models that support their market position.
