SEA-focused funds witness weaker fundraising in Q2 amid pandemic curbs

Asia shown on a glass globe. Photo: Getty Images via DealStreetAsia

Five Southeast Asia-focused funds secured a final close in the second quarter of this year, raising a total of $1.1 billion. While the total is three times higher than the previous quarter, DealStreetAsia’s latest research and analytics report shows that VC fundraising weakened during the quarter as a result of pandemic-induced national lockdowns.

More than 70 per cent of the final close value came from B Capital Group, which concluded its second fund in June at $820 million. The fund had made its first close in April 2019 at $406 million and then achieved its original target of $600 million in February. The fund was eventually closed in June after the company raised another $220 million.

To measure the quarterly performance of SEA-focused funds more accurately, we decided not to factor in past interim closings. With this, we found that a total of 11 fundraising milestones were reported in the second quarter with a total value of $639 million, lower than $748 million in the first quarter and $1.6 billion in the same period last year.

Throughout the first six months of the year, SEA-focused funds reported a total of 20 milestones with a total value of $1.4 billion. This compares to 22 updates with a total value of $1.9 billion a year before.

Singapore-based VCs reported 12 fundraising milestones, including five final closes. VCs in the city-state generated 92 per cent of all money raised by SEA-focused funds in the period.

VCs in the rest of Southeast Asia were not as lucky, with notable exceptions.

When asked how the current pandemic-led crisis differs from the Global Financial Crisis that started in 2008, East Ventures co-founder and managing director Willson Cuaca compared the current crisis with a game reset button that forced everyone to start all over again.

LPs are still willing to invest, said Mandiri Capital CEO Eddi Danusaputro, but they are adopting a ‘wait and watch’ approach. This might explain the delay in fundraising for vehicles currently in the market.

VCs focusing on sectors that received a boost from digital transformation should perform better than the rest, said Ideosource co-founder and managing director Edward Chamdani. These sectors include edtech, healthtech and insurtech.

It must be borne in mind that the fundraising performance of the first half of the year does not fully reflect the impact of the pandemic, which is yet to play itself out. A lot of LP-GP negotiations were carried out before governments in the region imposed lockdowns in the second quarter. The outlook for recovery remains shrouded in uncertainty as major economies in the region fall into recession.

The report, SE Asia’s VC Funds: Q2 2020, is exclusive to DealStreetAsia – Research & Analytics subscribers. Access the report

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.