While the fintech space has grown significantly in both Japan and South Korea in recent years, the countries have different approaches to financial innovation. We explore funding trends in the region, as well as broader themes and implications for the future.
Fintech in Japan and South Korea has seen significant growth over the last 5 years.
From 2015 through the end of Q2’20, investors poured a total of $3.6B in equity funding into Japan- and South Korea-based fintech companies across 416 deals.
However, even as combined funding reached a new high in 2019, the countries’ storylines have begun to diverge, with South Korea appearing more open to financial services innovation than Japan.
Below, we take a closer look at funding trends in the region’s fintech scene, as well broader themes and implications.
Parallel growth Lines start to diverge
Fintech funding trends in each country hint at 2 different developing fintech stories.
In Japan, total fintech deals fell from 72 in 2018 to 67 in 2019, as total dollars declined almost 30% over the same period, from $576M to $409M.
In South Korea, on the other hand, fintech deals rose slightly over the same period, from 35 to 36. Total funding jumped 365%, up from $210M to $977M, although this massive jump was largely driven by a $683M corporate minority round to Naver Financial.