What lies ahead for Southeast Asia’s COVID benefactors in 2021?

Despite witnessing close to a million COVID-19 cases, Southeast Asia’s digital economy continued to thrive, with over 40 million users coming online for the first time in 2020. 

This effectively meant that over 400 million people in the region were internet users, close to ~70% of the total population.

Being forced to stay online, technology and digital adoption skyrocketed across the board, but two popular sectors received the most attention: EdTech and FinTech (lending and other services). 

Approximately 55% of new digital consumers tried out a form of EdTech service, and 44% tried a new FinTech product (primarily loans)    

The million-dollar question now, for founders, VCs and the overall ecosystem remains – were these sectors the usual suspects and temporary beneficiaries of the pandemic, or is this part of a structural change going forward? 

While hard to predict, 9 out of 10 new digital consumers stated that they would continue to use online channels to procure these services. 

These could point to signs that these sectors could continue to see continued tailwinds for 2021. 


Irrespective of whether it was India, Southeast Asia or any other part of the world, Edtech was arguably the biggest beneficiary of the pandemic.

Billions were raised for start-ups across the globe, with investors betting a structural shift in the way learning is taught. 

Edtech in Southeast Asia has considerably lagged the likes of India and China over the last 5 years.

Approximately US$500 million has gone into 200 or so investments related to education technology over the last five years. To put that into context, Byju’s alone has raised more than this amount in the last two years. 

However, signs seem to be changing, with the likes of Indonesia based Ruangguru, Singapore based Emeritus, and Vietnam based Topica all raising significant rounds in the last couple of years. 

While the most popular have K-12 online based learning solutions, the region is now seeing the emergence of several other EdTech players, ranging from those focused on teaching specific   


A fast-growing belief voiced by many in the global venture ecosystem is the idea that every company will be a fintech in the future, no matter which space they start in. 

There certainly is merit to this idea, particularly as newer generations place trust in tech-enabled businesses over traditional banks and institutions (. aA World Economic Forum survey found that only 28% of millennial and Gen Z generations trust their banks to be fair and honest)

Southeast Asia, a traditionally underbanked region, has witnessed a 30% CAGR in fintech funding over the last 5 years.  A report by Oliver Wyman found that 2/3rd of the fintechs in the region witnessed an increase in demand during COVID-10, and 40% believing that this is likely to sustain. 

The first wave of Southeast Asia’s fintech boom has been driven by payments, remittances and lending, the obvious critical solutions required for improving financial inclusion in the Southeast Asia region. 

Several companies such as Akulaku, Funding Societies, Hoolah in the lending space, as well as Moka POS, NIUM, EMQ and others in the payments/remittance space have found considerable success in riding this digitization wave in fintech. 

However, later years, and particularly 2020, seem to point to an inflection point in the fintech journey of the region.

As the traditional first wave solutions continue to mature, new sub-sectors are emerging, with white spaces in Wealth Management, Capital Markets, InsurTech, RegTech and others ready to be disrupted.

This notion of a “FinTech 2.0” wave emerging can be seen from the numbers from the same report– even as overall fintech funding has gone up, share of payments, remittance and lending has come down from ~56% of total fintech funding in 2015 to ~40% last year.

While only time will tell whether Southeast Asia’s COVID-19 winners such as EdTech and FinTech will continue to witness accelerated user growth and adoption through 2021, early signs seem to point that this is likely to be the case.

These two sectors are part of a structural transformation rather than an artificial boost.