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 in 2025, 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.

Asia-Pacific investment came in at US$9.3 billion in 2025, down from US$11.7 billion the year before, a KPMG report on Wednesday (Feb 11) showed. The number of deals in the region’s fintech sector fell to 763 in 2025, from 1,028 in 2024. 

Private-equity activity in the region fell to an “all-time annual low” with US$101.8 million across nine deals. Venture capital investment reached US$7.5 billion – the lowest level in the past decade, which KPMG noted as “underscoring a regional slowdown in risk capital deployment”.

India was a “major growth driver” of Asia-Pacific investments, accounting for US$3.5 billion of total fintech investment in 213 deals, reflecting “strong investor appetite despite broader regional softness”.

Deal sizes in the region overall remained “relatively small”, KPMG said. Japan accounted for US$645.6 million of total investment, Australia attracted US$609.9 million and China drew US$876.1 million.

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

Such emerging markets include 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$116 billion in 2025, a significant rebound that came on the back of a surge in exit activity despite lowered deal volumes.

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This was due to increases in capital deployed to larger and more strategic deal sizes that focused on scaled growth platforms in venture capital, as well as mergers and acquisitions (M&A).

The shift, KPMG noted, 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,” he added.