Deal activity hit a new high of 393 investments across Southeast Asia in the first half of 2021, an increase from 327 in the same period in 2020 and 375 in 2019.
However, in terms of transaction value, the total capital invested in startups fell to $4.4 billion in the first half compared to $6.4 billion and $5.8 billion in the corresponding period in 2019 and 2020 respectively, according to Cento Ventures’ Southeast Asia Tech Investment – 2021 H1 report.
The decline in deal value is largely attributed to the absence of mega-deals from super apps such as Grab that is currently seeking to go public. Deals exceeding $100 million accounted for only 45% of the investment, significantly below the 50%-70% concentration in the past years.
Bukalapak and GoJek (prior to GoTo’s merger) each bagged deals worth a few hundreds of millions. However, other unicorns did not announce any significant equity round.
On the other hand, deals under $100 million grew, reaching a record of $2.4 billion. This indicates that interest in Southeast Asia’s tech economy remains strong. A quick comparison with other regions of emerging technology shows that Southeast Asia attracted more capital than Latin America, but less than India.
Deal sizes and valuations saw a sharp upturn in the first half of 2021. Median round sizes rose, with Pre-A rounds of $0.8 million, Series A rounds of $4.3 million, and Series B of $10 million.
Investment surged across most sectors with financial services and business automation receiving record capital injection. The retail and business automation sector has already surpassed their 2020 investment amounts, while financial services have grown to more than twice their 2020 amount.
Indonesia remains the primary destination for investment with companies such as Bukalapak, GoJek, Sicepat, and Ajaib attracting a significant flow of capital. Indonesian startups grabbed nearly 51% of the capital invested in the region.
Singapore’s investment allocation is driven by the Carro deal, followed by a long-tail of $10-50 million deals. Both Singapore and Indonesia accounted for 70% of the total number of deals.
Meanwhile, the Philippines gained a greater share of capital during this period with deals such as Gcash, Great Deals eCommerce, Kumu, and GrowSari accounting for about 9% of total capital raised in the region in H1 2021, up from 2% in H1 2020.