Southeast Asia Startup Funding Up 69% on 2015


From Tech in Asia

Investors injected US$310 million into Southeast Asia’s young tech firms in the second quarter of 2016, up 11.5 percent from US$278 million the previous year.

In the first half, tech investments stood at US$799 million, a 69.3 percent jump from US$472 million in the same period of 2015. One important thing to note: there were startups that raised money but chose not to disclose the amounts, so the tally could have been bigger.

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The year-on-year figures contradict talks of a cooling off in financing for startups.

However, if you zoom in on the quarterly figures, Q2 growth was slower than Q1 (which was a whopping 151 percent), and the absolute amount was lower than the first quarter’s investments, worth US$489 million.

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The Tech in Asia Database shows that the number of investment deals across Southeast Asia dropped in Q2 of this year versus the year prior (91 against 125), which means that the average funding round has gotten bigger.

Singapore and Indonesia once again outshone their neighbors.

Ecommerce startups remain the best funded thanks largely to Indonesia-based Tokopedia’s huge US$147 million funding round in April. Software-as-a-service and fintech were also the darlings of investors in the second quarter.

500 Startups was the most active investor – and that comes as no surprise. The Silicon Valley VC firm has moved at shotgun speed in Southeast Asia, even doubling the size of its regional fund, 500 Durians, to US$22 million late last year.

Singapore and Indonesia continued to figure prominently on investors’ regional radar. The two countries outshone their neighbors with US$405 million and US$237 million worth of investments from January to June, respectively.

Time to be prudent

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Funding in the different stages were mixed. Except for series A, all stages recorded a rise in the first half of the year. But looking at Q2 figures alone, seed and series A numbers fell year-on-year, while series B and C grew.

There were some US$179 million investments whose funding stages weren’t disclosed, making it hard to draw conclusions. One trend stands out, though – late-stage startup funding is still rare.

That means startups need to become profitable, raise funds through an IPO, or get acquired to survive.

Take Lazada, for example. The online store was reportedly about to run out of money beforeAlibaba swooped in with a massive investment to take a controlling stake. Nonetheless, the startup community views the deal as a win for Southeast Asia. Lazada’s acquisition was the only significant exit seen in Southeast Asia during the second quarter.

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Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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