SE Asia Deals Barometer Report: At $382m, startup fundraising plunges to lowest this year in Nov

November was another reminder of the challenges that persist in startup fundraising in Southeast Asia.

Privately held companies managed to raise a mere $382 million last month, the lowest so far this year and also the lowest in the last 12 months, according to proprietary data collated by DealStreetAsia.

At 45, the number of deals sealed in November was also the lowest this year and the last twelve months.

The money raised by startups last month was down 42% from the $663 million they amassed in October, the data further show. The number of deals also plunged 15% month-on-month from October’s 53.

On a year-on-year basis, fundraising fell 30% as startups in the region had raised about $540 million from 62 deals in November 2022.

It was the eighth month this year that fundraising in the region fell below the psychologically-important $1 billion mark. Monthly fundraising in 2023 surpassed the nine-digit figure just three times—in May ($1.05 billion), July ($1.78 billion), and September ($1.1 billion).

The data compiled by DealStreetAsia in November included venture capital deals, private equity, debt financing, corporate rounds, and convertible notes. There were also eight transactions in November that did not disclose the funding stages.

The total amount raised by startups in the January-November period stands at about $8.58 billion from at least 680 transactions, which suggests deal value this year will be significantly below the $15.8 billion raised in the entire 2022. Fundraising in 2022 itself was 32% below 2021’s $23.17 billion—a record high.

The region has so far produced only one unicorn in 2023—eFishery, which garnered a valuation of over $1 billion after it raised $108 million in May.

In 2022, eight startups earned the much sought-after unicorn tag, while in 2021, the number stood at 23.

Only one megadeal in November

In a sign that investors continue to pull their purse strings and go slow on fresh investments, there was only one megadeal—a transaction worth at least $100 million—in the month, compared with two big-ticket deals in October.

The megadeal—by Singapore insurer Singlife—brings the total megadeals so far this year to 25. In October, two big-ticket transactions raised a combined $331 million.

The top deals of Nov 2023

Singlife raised about $133 million through a capital injection from Japan’s Sumitomo Life Insurance Company (Sumitomo Life). Singlife issued over 23 million new shares to the Japanese company, representing 4.92% of its increased share capital. Following the capital injection, Sumitomo Life increased its ownership to 27% of Singlife. The latest investment will be used to support Singlife’s business growth.

The month of May posted the most number of megadeals so far this year at five, but the total amount raised was only about $649 million that month.

SG startups take the lion’s share of SE Asia funding

Singapore continued to reinforce its position as a regional hub for startups and investments in November as it accounted for about 87% of the total money raised during the month.

Data compiled by DealStreetAsia showed that startups based in the city-state bagged $331 million from 28 transactions, leading the pack in terms of deal volume and value, in November.

The average deal size in Singapore last month was $12.7 million. Two deals did not disclose financial details. That compares to the overall average deal size of $11.6 million.

In October, startups in the city-state had raised about $388 million from 32 transactions, accounting for about 59% of the month’s total amount raised.

Insurer Singlife led the deal in Singapore last month with its $133-million capital injection from Japan’s Sumitomo Life.

Notably, last month’s overall fundraising only involved startups in Singapore, Indonesia, the Philippines, and Vietnam. Malaysia, Thailand, and Myanmar did not witness any deals.

In Indonesia, 10 transactions raised a combined $35.8 million, down from the $147 million that startups based in the country raised in October. The top deal in the country was by Honest Bank, which received $18 million from Japan’s Orient Corporation.

Startups in the Philippines raised $11.1 million last month from two transactions, while Vietnam’s five deals managed to secure $4.3 million. Twelve deals did not disclose the amount raised.

Fintech remains investors’ favourite

DealStreetAsia’s compilation showed that the financial technology (fintech) and financial services sectors continued to attract the most funding in the region in November, clocking 11 deals that raised a combined $182.7 million, accounting for about 48% of the total amount raised.

In the fintech space, there were 10 transactions that raised about $50 million, led by the $18 million raised by Honest Bank.

E-commerce followed in terms of deal volume, with four deals that raised $33.8 million in total. This was led by Philippines-based e-commerce enabler Etaily, which raised $17.8 million in a Series A funding round co-anchored by Chinese PE firm SKS Capital and Singapore’s Pavilion Capital.

Software and IT secured about $33 million from three transactions while Data Analytics saw two deals that raised $52.2 million in total. Agritech and healthtech also posted two deals each that raised $18.8 million and $15.7 million, respectively.

Early-stage tops deal volume

A closer look at the 45 deals that startups in the region were involved in last month showed that investors continue to favour early-stage deals, with seed-stage funding getting the most interest, in terms of deal volume.

The biggest seed funding last month was by LXA, a Singapore-based digital platform that sells pools of home loans to asset managers and financial firms. Th startup raised $10 million from backers including New Enterprise Associates Inc, Openspace Ventures, and Singapore Economic Development Investment (EDBI).

Thirteen seed deals raised a combined $41.8 million in November, followed by seven Series A transactions that secured $68.6 million in total. Pre-seed stage raised $6.9 million from four deals while Series B scored $41.7 million in total from four transactions.

There were also three corporate rounds, two debt financings, two convertible notes, one private equity round, and one pre-Series A deal during the month. Eight transactions did not disclose funding stages.