Funding in the Asia-Pacific fintech sector declined significantly in the first half of 2026 amid regulatory shifts and geopolitical concerns, with India leading and Hong Kong positioning itself as a digital asset hub through strategic policy developments.
Asia-Pacific fintech funding lost momentum sharply in the first half of 2026, with KPMG putting total investment at US$4.6 billion across 350 deals, down from US$7.1 billion across 426 deals in the second half of 2025. The low point came in the first quarter, when deal value fell to US$1.2 billion before recovering to US$3.4 billion in the second, as investors reassessed late-stage pricing, navigated regulatory change and trimmed exposure to geopolitical risk. Even so, capital did not disappear altogether: it clustered around a handful of large Indian rounds and around policy-backed digital-asset infrastructure in Hong Kong. (kpmg.com)
India remained the region’s clear outlier. KPMG said it attracted US$2.0 billion across 101 deals in H1, slightly up on the US$1.8 billion recorded in the previous six months, leaving South Korea well behind on US$899 million and Singapore on US$499 million. The biggest transaction was CRED’s roughly US$900 million raise from Meta Platforms. Reuters reported in June that the deal valued the Indian group at US$4.5 billion post-money and was intended to speed growth ahead of a future listing. That valuation was above CRED’s 2025 round, but still below its 2022 peak, a neat illustration of the reset KPMG says has been hanging over late-stage fintech. (kpmg.com)
Other Indian companies in the regional league table tell a similar story: investors were still willing to back scale, but often on more structured terms. KPMG ranked KreditBee and Juspay among the half year’s largest APAC deals. In Juspay’s case, however, the company said in January that its disclosed transaction was a US$50 million Series D follow-on led by WestBridge Capital, valuing it at US$1.2 billion and combining primary funding with secondary sales that gave early investors and ESOP holders liquidity. Juspay said it was already processing more than 300 million transactions a day and running annualised payment volumes above US$1 trillion across customers including Amazon, Google and HSBC, underlining why payments infrastructure kept drawing interest even in a thinner market. (kpmg.com)
Hong Kong stood out for a different reason: regulation rather than fundraising. KPMG said the territory continued to position itself as a fintech leader in digital assets, helped by the Hong Kong Monetary Authority’s February blueprint under its “Fintech 2030” strategy. The plan singled out artificial intelligence, distributed ledger technology and high-performance computing as priority enablers, supported by stronger data and cyber resilience foundations. That agenda was followed on 10 April, when the HKMA granted stablecoin issuer licences to Anchorpoint Financial and HSBC. Eddie Yue, the regulator’s chief executive, called the move “an important milestone for the development of digital assets in Hong Kong”. (kpmg.com)
The stablecoin regime itself had been put in place earlier. Hong Kong’s government said in June 2025 that the Stablecoins Ordinance would take effect on 1 August that year, creating a licensing framework for regulated stablecoin activity and also allowing a limited offering route to professional investors from unlicensed issuers. The latest position suggests the rollout is still deliberately controlled. Anchorpoint began a phased launch of HKDAP in August for institutional distributors and professional investors, with an initial focus on cross-border payments and the settlement and distribution of tokenised real-world assets. Yet Anchorpoint’s own website now says HKDAP has not officially launched, while HSBC was still telling investors in August that it planned to issue its Hong Kong dollar stablecoin later in 2026 through PayMe and the HSBC HK App. (info.gov.hk)
That preference for regulated, operationally useful technology also helps explain why regtech kept attracting attention. KPMG said corporates were showing growing interest in AI-led compliance tools and workflow automation, particularly around anti-money laundering and know-your-customer checks. One clear regional example was IDfy, the Indian identity-verification group, which raised more than US$52 million in February. FinTech Futures reported that the round comprised US$24 million of primary capital and US$28 million of secondary investment, with Neo Asset Management leading and backers including Blume Ventures, Analog Capital, Elev8 Venture Partners, Indiamart and Kae Capital returning. IDfy said the proceeds would “help us accelerate global expansion, invest in strategic acquisitions, and deepen innovation across our trust and privacy stack”. (kpmg.com)
Elsewhere in the region, the numbers were markedly smaller. Australia drew US$456 million across 28 deals and Japan US$204.5 million across 37, according to KPMG, while China managed only US$149 million across 33 deals. KPMG argues that China’s weakness should not be read simply as a collapse in demand: in payments, consumer finance and digital lending, many capabilities have already been absorbed by banks, insurers and large platforms, meaning more activity now happens through partnerships and joint development rather than classic venture, private-equity or M&A routes. That helps explain why headline funding totals alone no longer capture the full shape of fintech competition in the region. (kpmg.com)
For the rest of 2026, KPMG expects selectivity rather than a broad rebound. It says India should keep pulling in capital, Hong Kong is likely to keep building policy support around stablecoins and tokenisation, and demand for compliance technology may strengthen as finance chiefs push for “what delivers measurable value”. In Daniel Teper’s assessment for KPMG Australia, “AI is poised to play an increasingly important role” in helping organisations manage risk and improve efficiency. After a half year in which money was scarcer, that may be the clearest signal of where investors still think fintech can pay its way. (kpmg.com)
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