South-east Asia startup deals hit record high in H1: report

A RECORD number of investments poured into South-east Asian startups in the first half of this year, although total capital invested fell as investors focused on smaller deals in the region's fast-growing tech sector.

The number of investments made hit a record high of 393 in the first half, well ahead of the 327 investments made in the same period last year, data from Cento Ventures showed.

The total amount raised was US$4.4 billion, lower than the US$5.8 billion recorded in the same period last year. This was thanks in part to a drop in the number of "mega-deals" - or startups raising above US$100 million - during this period, as the region's largest startups head for the public markets.

This year, these mega deals accounted for only 45 per cent of investment, significantly below the 50 per cent to 70 per cent concentration in the past years, according to Cento Ventures. In a first for the region, initial public offerings accounted for more than 50 per cent of liquidity.

The majority of venture capital deals done - or 209 investments - were for pre-Series A. Less than 10 per cent, or just 26 deals, were Series C and above.

Startups also benefited from a rise in valuation, the data showed, with a particular spike in the median valuation for Series B startups that almost doubled to US$55 million.

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Indonesian startups were the most popular, taking slightly more than half of the capital raised in the region in the first half. Singapore startups were next at 32 per cent.

For the first half, the region attracted more capital than Latin America, but less than India. India remains the most-funded region, attracting US$10.8 billion of capital led by large deals such as Byju's US$1 billion, Swiggy's US$800 million and Zomato's US$576 million round.

South-east Asia is a huge contender. September alone saw a number of mega deals for the region, including Advance Intelligence Group's US$400 million fundraise, Carousell's US$100 million round and most recently Ninja Van's US$578 million funding.

As more newly-minted unicorns clock deals in recent months, there could be some pick up in deal activity and volume for the second half of the year.

The data compiled was primarily based on public press announcements as well as community disclosures from companies and their investors, said Cento Ventures. The team then researches the validity of claims and supplements incomplete information with insights from its own industry sources or educated guesswork, it said.

For this report, Cento Ventures analysed and verified close to 4,300 financing and liquidity events. However, a few large deals could have avoided detection, it said. Pre-Series A deals data in the region is also "far from exhaustive" due to a sheer volume of deals in the US$10,000 to US$250,000 range.

"Do take our 'number of deal' assessments for pre-Series A with a large handful of salt," said Cento Ventures.