Faced with an unprecedented healthcare crisis that caused market dislocation around the world, Southeast Asia’s startups put up a resilient front in 2020. Fundraising by privately-held companies in the region during the year stood at $8.6 billion, according to DealStreetAsia – Research & Analytics’s latest report.
According to SE Asia Deal Review: Q4 2020, the total capital raised by Southeast Asia-based startups in 2020 was nearly 2% lower than the 2019 tally of $8.76 billion. That decline can largely be attributed to corrections in company valuations and fewer mega deals inked during the pandemic season.
“What remained unchanged [amid the pandemic] is our belief in the potential of the region,” said Indonesia-based venture capital firm Alpha JWC Ventures’s co-founder and general partner Jefrey Joe. “The year 2020 also reminded investors how important unit economics are.”
Ride-hailing and payment unicorns Gojek and Grab, the region’s two most highly-valued startups, raised at least $1.6 billion and $1.1 billion, respectively, to emerge as 2020’s largest fundraisers.
Among markets, Singapore maintained its position as the investment destination of choice in 2020, notching up deals worth a combined $3.66 billion. Indonesia was a close second.
Southeast Asian countries’ share of deal value in 2020
As the battle against the pandemic rages on, these Southeast Asian markets continue to offer attractive opportunities to investors.
“Indonesia continues to be an attractive destination. We’ve also seen an increased volume of high-quality opportunities from Thailand, the Philippines and Vietnam as these economies continue to mature,” said venture capital firm Openspace Ventures’s founding partner Hian Goh.
Among sectors, fintech, e-commerce, health tech and edtech were the biggest beneficiaries of a new digital wave set in motion by stay-at-home orders and social distancing requirements in 2020. With some of the pandemic-induced behaviours expected to linger on, new opportunities could further emerge.
“Because of the convergence of new technologies and social behaviour changes due to the pandemic, startups face a huge opportunity. We are quite optimistic about the new opportunities presented by technology innovations,” said SoftBank Ventures Asia CEO and managing partner JP Lee.
The SE Asia Deal Review: Q4 2020 report covers fundraising by startups in the fourth quarter and overall year, including data on:
- top dealmakers and sectors in each country
- quarterly deal value and volume trends
- median deal sizes
- deal volume at different funding stages.
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