South Korean fintech companies have been expanding their footprint in south-east Asia following a series of deregulation reforms initiated by local governments in the mid-2010s.
Overall, South Korean fintech companies announced nine FDI projects in south-east Asian countries (Brunei, Laos, Malaysia, the Philippines, Indonesia, Singapore, Cambodia, Thailand and Vietnam), worth a total of around $158m, between 2018 and 2021, according to fDi Markets. No such investment project was recorded before 2018.
South Korean firms were not the only Asian investors interested in chasing fintech opportunities in the fast-growing markets in south-east Asia. Investors from the Asia-Pacific region announced 64 investment projects worth $1.128bn between 2018 and 2021, fDi Markets figures show, accounting for almost half of the overall $2.47bn in fintech FDI the region has attracted in the period.
Reforms implemented by some South-east Asian countries, combined with a burgeoning, tech-wise urban middle class, contributed to attracting growing levels of foreign investment to fintech markets in the region. Starting in 2015, the Singapore government has made the country’s fintech regulation more flexible. The following year, the Vietnamese government adopted a series of new plans pushing in the direction of a cashless society and a start-up friendly environment. Since 2017, Indonesia has also broadened its investment opportunities by deregulating fintech industries.
South Korean fintech companies have been quick to make the most of this evolving regulatory environment.
DBX, a South Korean crypto exchange platform, made three fintech investments, worth around $91.8m, to expand its business operation in Cambodia, Singapore and Indonesia in February 2021. These investments made the company become the largest Asian investor in south-east Asia fintech markets between 2018 and 2022, fDi Markets data shows.
Chai Finance, a Korean mobile payments fintech start-up, has raised $45m to expand its business operation and develop its high-end payment infrastructure in south-east Asia in December 2021, backed by KT Investment, Conductive Venture, Nordstar Capital, Samsung Next and B Capital, according to fDi Markets investor signals. Chai Finance expanded its business in Vietnam and Thailand in August and December 2021.
Viva Republica, one of the biggest South Korean Fintech start-ups, raised $410m in funding to expand its business into south-east Asia in June 2021, according to investor signal data. Lee Seung-Gun, the founder of the Viva Republica fintech, said the company is planning to raise up to $1bn to expand its app in south-east Asia in an interview with the Financial Times on 23 March. Viva Republica opened an office in Vietnam in 2019.