JAKARTA (TheInsiderStories) - Technology startups in Southeast Asia (SEA) have earned funding up to US$8.2 billion in 2020, Cento Ventures reported. Nearly 50 percent of the funds went to unicorn pockets, including Malaysia’ Grab Holdings, Indonesia’ GoJek, Bukalapak, and Traveloka.
Based on the report, the fundraising fell by 3.5 percent compared to 2019 of $8.5 billion, as it was triggered by the COVID-19 pandemic. More than $100 million deals account for 57 percent of the total investment and deals between $50 - 100 million set a record value of $1.1 billion, a 26 percent increased from 2019.
Despite the effects of the pandemic, Southeast Asia experienced the smallest decline in startup investment values compared to other developing countries, such as India, which fell 31 percent, and Africa, which fell 38 percent.
“COVID-19 has a different effect in each country. Start-ups in the United States and Europe recorded new investment records last year, with investment value growing 13 percent and 15 percent, respectively. Meanwhile, China is also experiencing a growth of 6 percent, ”wrote the report released on Sunday (03/28).
Last year, said Cento, Indonesian startups controlled 70 percent of total funding in the region. Together with Singapore contributed 64 percent of the total agreements. The amount of investment in Indonesia is driven by supper-apps GoJek, supported by Bukalapak, Waresix, Kopi Kenangan, and LinkAja.
Southeast Asia is home to nine independent startups with five subsidiaries that have a valuation of over $1 billion. Regionally, SEA Group, which is the parent of Shopee, has touched a market capitalization of around $50 billion. The Singaporean company, JustCo, officially joined the unicorn list in Southeast Asia at the end of last year.
Based on data from Cento, SEA Group and Grab are classified as independent companies with a valuation of more than $10 billion for the region. GoJek is included in this category for Indonesia. While, for a group of companies with a valuation of more than $1 billion, the regional areas have Traveloka, Indonesia has Tokopedia and Bukalapak, Singapore has JustCo and Qoo10, and Vietnam has VNG Corp.
In 2020, wrote the report, Indonesia will continue to collect startups with a valuation of more than $250 million. These companies include Kopi Kenangan, Guru’ Room, SiCepat, Akulaku, Sociolla, Pasar Polis, Halodoc, Modalku, Xendit, and FinAccel.
Southeast Asian technology investment may not hit new records throughout 2020, but startups in the region have faced various challenges and have proven themselves to be able to find new opportunities to grow and attract new investment.
“We estimate that if the pandemic recedes in 2021, then we will see continued growth in venture capital and realization of exits action. We saw a slight reduction in the share of early stage investment (those sized at less than $3 million), with 238 deals in 2020 compared to 281 in 2019,” said the report.
Over half of tech investment flowed to the super-app companies and to online retailers, totaling over than $4 billion in 2020. Other sectors that saw rising interest included payments, logistics, and local services. Investment into payments and other financial services startups now forms the largest sector after the multi-vertical one.
At present half of investment in this sector goes into payments startups, with the rest spread across the other types of financial technology (FinTech). Last year, the region also saw JustCo included in Southeast Asia’ companies valued over $1 billion.
“We also saw expansion of the group of startups that have exceeded $100M in valuation, adding more than 20 names that included Stashaway, Waresix, Mekari, Shopmatic, Sunday,” said Cento.
AsFor the first half of the year, liquidity events are where 2020 differed most from previous years. While the number of exits ended up on par with 2018, the proceeds generated fell significantly to under $1 billion. According to Cento, fair to assume that some larger potential deals have been delayed, as the sort of extensive due diligence required by international acquirers was harder to accomplish during this period of travel restrictions.
In this year, wrote the report, tech investment may not have reached any new heights in 2020, but startups in the region have risen to the various challenges and proven they can find new opportunities to grow and attract new investment.
“We anticipate that if the pandemic recedes throughout 2021, we will see resumed growth in VC investment alongside some notable exits, by the time our next report is published in H1 2021,” concluded the report.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
