SE Asia Deals Barometer Report: Startup funding rebounds to $1.2b in Dec despite fewer deals

After falling below the psychologically important $1 billion mark in November, startup fundraising in Southeast Asia rebounded in December.

Privately-held companies secured $1.22 billion last month from 61 transactions, which include venture capital, private equity, debt financing, and corporate rounds.

December’s fundraising value was a 64% jump from the $743 million of November, show proprietary data compiled by DealStreetAsia. The number of deals in December, though, was a fall from the previous month’s 67.

November was the worst month for startups in Southeast Asia in 2022 in terms of both fundraising value and volume.

On a year-on-year-basis, fundraising dropped 32% last month as startups had raised $1.8 billion from 84 deals in December 2021.

In total, startups raised $21.67 billion in the entire 2022 from 1,108 deals. The fundraising is down from $25.7 billion raised from 968 transactions in 2021.

December saw only three megadeals, i.e transactions where the funding size is at least $100 million, but they raised a combined $842.5 million, or about 69% of the month’s overall fundraising. November’s three megadeals, on the other hand, had raised an aggregate of $338 million, or 45.5% of that month’s overall fundraising.

Last month’s biggest deal was sealed by e-commerce major Lazada Group. Lazada’s Southeast Asian entity received $342.5 million in capital infusion from its parent company Alibaba in December. It brought the total investment made by Alibaba into the Southeast Asian e-commerce firm to $1.6 billion since the beginning of 2022.

Singapore-based crypto trading and lending platform Amber Group also completed a $300-million Series C funding round in December to protect clients affected by the collapse of FTX.

Indonesia-based fintech startup Akulaku also raised $200 million from Mitsubishi UFJ Financial Group Inc as part of the Japanese company’s effort to expand its presence in the country.

The three megadeals of December 2022

Singapore startups corner most of the funds

As in the previous month, Singapore remained the top investment destination in December, with startups in the city-state cornering the lion’s share of funding at about $861 million from 31 transactions, accounting for 71% of the total funds raised in the month.

Two of the three megadeals that took place last month involved Singapore-based entities — Lazada Group and Amber Group.

Other notable deals in Singapore included Doctor Anywhere’s $38.8-million Series C funding led by Novo Holdings and ShopBack’s $30 million Series C fundraising, which was anchored by WestPac.

Data compiled by DealStreetAsia also showed that Indonesian startups were involved in 19 deals that raised an aggregate of $272.1 million, higher than the $216 million they raised in November from 16 deals.

Akulaku’s $200 million funding from Mitsubishi UFJ Financial Group Inc was the largest in Indonesia last month. Akulaku offers fintech services including consumer credit, digital banking, insurance brokerage, and BNPL in Indonesia, Malaysia, the Philippines, and Vietnam.

Insurtech startup PasarPolis and accounting and bookkeeping firm Paper.id also raised $12 million each.

Startups in Malaysia scored $59.5 million from four transactions, led by the $50 million raised by Teleport, the logistics venture of Capital A Berhard (formerly known as AirAsia Group Berhard), which operates the Malaysian carrier AirAsia.

In the Philippines, there were three transactions that raised a combined $17.9 million, while Vietnamese startups raised about $5.8 million from four deals.

Fintech, e-commerce startups raise more than $1b combined

Startups in the fintech and e-commerce verticals grabbed the most funding — $1.1 billion. Fintech saw 15 deals valued at about $610 million, while e-commerce secured $426 million in total from nine deals, thanks mainly to Lazada’s $342.5 million capital infusion.

In comparison, there were 13 fintech deals in November that raised a combined $182 million and six e-commerce deals that raised a total of $48.1 million.

Logistics also joined the top sectors by fundraising value in December with $50.8 million in total funding from two deals. Healthtech also raised $48.8 million while gaming scored $17.5 million.

Together, the top five sectors by funding value — fintech, e-commerce, logistics, healthtech, and gaming — raked in $1.15 billion, or about 94% of the total deal value in December.

Early-stage deals continue to dominate

Early-stage funding continued to dominate Southeast Asia’s dealmaking scene in December in terms of deal volume. Seed rounds took the lead at 20 deals, followed by pre-Seed and Series A rounds that saw seven deals each.

Pre-Series A and Series B rounds registered four deals each while eight deals in December did not specify their funding rounds.

The largest seed funding in December was by Digital Entertainment Asset, the operator of NFT gaming platform PlayMining. The startup secured $10 million from alternative investment group LDA Capital.