Pulse of Fintech H2 2025: Asia-Pacific

ASPAC region sees both fintech deal value and volume fall to ten-year lows

Fintech deal value and deal volume dropped from an already soft $11.7 billion across 1,028 in 2024 to $9.3 billion across 763 deals in 2025 — levels not seen in over ten years — driven by a number of factors, including geopolitical tensions, macroeconomic factors, and continued caution on the part of fintech investors. Total fintech investment was relatively steady between the first and second half of the year — with $4.8 billion across 401 deals and $4.6 billion across 362 deals respectively.

While deal sizes were relatively soft compared to historical norms, a range of jurisdictions attracted $100 million+ deals during H2’25, including Australia-founded, now Singapore-based, Airwallex — which raised a $330 million VC round,¹ the purchase of majority stake in Japan-based AI-driven business credit solutions firm Upsider by Mizuho Financial Group for $313.6 million,² a $200 million VC raise by South Korea-based fintech super app Toss, and a $140 million VC raise by Indonesia-based credit card issuer Honest.³

VC investment accounts for majority of fintech investment in ASPAC

VC investment accounted for the lion’s share of fintech investment in the ASPAC region during 2025, accounting for $7.5 billion across 672 deals, while M&A activity accounted for $1.7 billion across 82 deals, and PE activity accounted for just $101.8 million across 9 deals.

Slowdown in fintech investment across most jurisdictions

A number of jurisdictions in the ASPAC region saw a slowdown in investment between 2024 and 2025. In China, total investment fell from $991.7 million to $876.1 million year-over-year — driven by a combination of persistent economic challenges, geopolitical tensions, and increasingly tight regulations. In Australia, fintech investment fell from $1.9 billion to $609 million as the market continued to experience some rightsizing. South Korea — a relatively nascent fintech hub in the region — was one exception to the fintech investment downturn in 2025; it saw fintech investment rise from $245.6 million to $402.4 million year-over-year — although half of this investment came from Toss’s $200 million VC raise.

Trends to watch for in H1’26

AI continuing to be a key focus for investors across the ASPAC region — including LLMs, generative AI applications, and agentic AI — with increasing focus on real world solutions.
Growing focus on turning data into variable and tradable assets, in combination with an increasing focus on privacy computing.
China-based fintechs embracing dual-market routes to grow overseas — replicating domestic payments and microcredit models in emerging markets, while focusing on more transformative solutions in mature markets.
Macroeconomic and geopolitical uncertainties continuing to drive caution among fintech investors, including the protracted economic slowdown in China and increasing concern that inflationary pressures in Australia could lead to a rate increase.
Financial institutions in Australia prioritizing fintechs able to help them drive efficiencies and cost reductions.
Growth of digital asset capability, incubation and scaling programs across Japan, Korea, Singapore and Australia.

Across the fintech landscape we’re seeing some of the smaller providers looking at consolidation to drive scale and maintain relevance, as well as broaden capability among firms targeting slightly different parts of the market and customer cohorts. These kinds of consolidation deals almost always make sense because they create more longevity, profitability and sustainability.

Daniel Teper

Partner, M&A and Head of Fintech

KPMG Australia