Apac fintech investment down 20.5% in 2025, venture capital investment hits decade-low

[SINGAPORE] Fintech investment in Asia-Pacific declined by more than 20 per cent, with private equity and venture capital investment reaching annual and decade lows, respectively.

This reflects global trends of growing investor scrutiny around the sustainability of current artificial intelligence valuations, potential economic slowdowns in the region and ongoing geopolitical tensions.

Apac investment reached US$9.3 billion in 2025, down from US$11.7 billion the year before, based on a KPMG report on Wednesday (Feb 11). The number of deals in the Apac fintech sector fell from 1,028 in 2024 to 763 in 2025. 

Private-equity activity in Apac fell to an all-time annual low of US$101.8 million across nine deals. Venture capital investment reached US$7.5 billion – the lowest level in the past decade, underscoring regional slowdown in risk capital deployment.

India was a major driver in Apac investments, accounting for US$3.5 billion of total fintech investment across 213 deals, underscoring strong investor appetite despite broader regional softness.

Deal sizes across the region overall remained relatively small. Japan accounted for US$645.6 million of total investment, Australia attracted US$609.9 million and China recorded US$876.1 million.

Despite the regional decline, investor interest in business-to-business payments infrastructure, real-time payments and emerging markets with growing digital payment adoption remained robust.

Such emerging markets included South-east Asia, where investment activity was supported by regulatory progress, financial inclusion initiatives and the expansion of instant payment systems.

Global fintech investment reached US$104.4 billion, a significant rebound due to a surge in exit activity despite lowered deal volumes.

This was due to increases in capital deployed to larger and more strategic deal sizes that focused on scaled growth platforms across venture capital and mergers and acquisitions (M&A). The shift is reflected in payments-focused M&A activity turning towards mid-sized capability-driven transactions that centre on operational strength and long-term competitiveness, rather than aggressive scale alone. 

Karim Haji, global and UK head of financial services at KPMG, said: “The fintech sector is entering a more balanced phase – one defined by selective growth, clearer paths to profitability and improving liquidity.

“While macroeconomic and geopolitical risks remain, the combination of stronger exit markets, greater regulatory clarity and accelerating innovation provides a constructive foundation for sustained investment and long-term value creation.”