SE Asia Deals Barometer Report: Lazada's capital raising lifts startup funding to 11-month high of $1.78b in July

Investors poured $1.78 billion into Southeast Asian startups in July this year—an 11-month high.

The 73 deals sealed in the month included four transactions valued north of $100 million, show proprietary data compiled by DealStreetAsia.

The overall startup funding in July was buoyed mainly by the $845 million that e-commerce giant Lazada pocketed from its parent company Alibaba. Lazada has raised over $1.19 billion from Alibaba this year alone.

July’s total funding of $1.78 billion was the highest since August 2022, when startups in the region raised $2.05 billion from 105 deals. The July deal value represented a more than 300% increase from the $0.44 million that private companies in Southeast Asia raised in June from 67 deals.

Without the Lazada deal, startup funding in the month would have stood at $930 million, which is still more than double that of June’s fundraising but still below the psychologically-important $1 billion mark. This is only the second time so far this year that monthly startup fundraising in SE Asia has crossed the 10-digit dollar mark (see chart below).

The deals compiled by DealStreetAsia include venture capital, debt financing, and crowdfunding transactions. There were 19 transactions that did not disclose the funding amount.

On a year-on-year basis, funding value in July 2023 surged by about 93% from last year’s $0.93 billion raised from 92 transactions. The lowest monthly funding value this year was recorded in February, when private companies managed to secure just $0.41 billion from 55 transactions (see chart above).

The July figure brings the total amount raised by startups in Southeast so far this year to at least $5.94 billion from 570 deals. For the entire 2022, total funding in the region had dropped 32% to $15.8 billion from 2021’s record highs.

Megadeals push up deal value

Data compiled by DealStreetAsia show that there were four megadeals—transactions worth at least $100 million—in July that brought the total number of such deals so far this year to 17.

July’s four megadeals raised a combined $1.22 billion, or about 68% of the total amount raised in the month. The month of May had witnessed the most number of megadeals so far this year at five, but the amount raised that month was just $649 million.

Besides Alibaba’s $845-million capital injection into Lazada, which topped the megadeal table in July, Maribank, the digital banking unit of Southeast Asian tech major Sea Ltd, also received $172.5 million from SeaMoney, the digital payments and financial services arm of Sea.

Thai Credit Retail Bank secured a $105-million loan from the International Finance Corporation (IFC), a member of the World Bank Group, in July to support female entrepreneurs in Thailand—the third biggest transaction.

Indonesia’s healthtech platform Halodoc managed to get into the megadeal table after raising $100 million from conglomerate and existing investor PT Astra International Tbk to complete its Series D funding round.

The four megadeals of July 2023

No startup in Southeast Asia made it to the unicorn club in June and only one company has earned the unicorn tag so far this year—eFishery, which became Indonesia’s latest unicorn after its $108-million funding round in May.

In the entire 2022, eight privately-held startups in the region earned the much sought-after unicorn tag. In 2021, there were a record 23 startups in the region that crossed the $1 billion valuation.

Singapore remains a top destination for investment

In July, Singapore remained the top destination for investment in Southeast Asia, accounting for about 75% of all the capital raised in the month at $1.33 billion.

The city-state also accounted for 64% of the total number of deals at 47, DealStreetAsia’s compilation showed. The top deals in Singapore were led by Lazada Group and Maribank.

Indonesia ranked second in July after it attracted $207 million in funding from 12 transactions.

Halodoc’s $100-million Series D funding was the country’s largest for the month, followed by the $47.7 million that agritech unicorn eFishery raised in Series D+ round, which was backed by Malaysian pension fund KWAP and regional VC investor 500 Southeast Asia.

Thailand took third place in terms of fundraising value as it secured $105 million from two transactions, led by Thai Credit Retail’s debt financing. APX, a provider of door-to-door cargo transportation services in the country, raised an undisclosed sum in pre-Series A funding. led by ORZON Ventures.

Vietnamese startups raised $84.1 million from seven deals while the Philippines reported three transactions that gathered $37.2 million in total.

Cambodia saw one deal—a $15-million loan to microfinance startup Angkor Microheranhvatho Kampuchea (AMK) from BIO, a government-owned institution also known as the Belgian Investment Company for Developing Countries.

Malaysia’s lone transaction in July—Shell Malaysia’s investment into Arus Oil—did not disclose the funding amount.

Fintech leads in volume, e-commerce most funded sector

Startups operating in the financial technology (fintech) and financial services sectors were involved in the most number of deals in July at 13, raising $230 million. Digital banks also raised a combined $199 million from three transactions.

However, Lazada’s capital injection brought e-commerce to the top of the leaderboard in terms of deal value, at $877.8 million from 5 transactions.

Fintech accounted for a third of all private funding last year, up from a quarter in 2021, according to DealStreetAsia DATA VANTAGE’s SE Asia Deal Review: Q4 2022 report. It also accounted for 22% of the deal volume in 2022, down from 31% in 2021 as the easing of COVID-19 restrictions spurred investments in other verticals.

Meanwhile, in July, private companies operating in the health technology (healthtech) sectors raised $171 million from 13 transactions, led by Halodoc’s $100-million fundraise. MiRxes, a Singapore-based biotech firm, also raised $50 million in its Series D funding round during the period.

Three agriculture technology (agritech) transactions raised a total of $49.7 million while retail and mobility tech startups secured an aggregate of $78.6 million from one deal each.

Data analytics startups, on the other hand, were involved in four transactions that raised about $20.6 million in total.

Early-stage funding remains in favour

In July, investors continued to focus on early-stage investments. DealStreetAsia’s compilation showed that there were 17 seed and 10 series A rounds in Southeast Asia in the month. Fifteen deals did not disclose their funding stages.

Indonesia-based electric vehicle startup MAKA Motors raised the largest seed funding in the region last month at $37.6 million from a host of investors led by AC Ventures, East Ventures, and South Korea’s SV Investment.

In the Series A stage, Singapore-headquartered fintech startup Mindigital secured 50 million yuan (about $6.9 million) while HRtech startup Impress.ai and Vietnamese edtech firm VUIHOC raised $6 million each.

For the entire month, there were also seven debt financing, six pre-seed rounds, five corporate rounds, four Series D, four Pre-series A, three series B, one series C, and one crowdfunding deal.