SE Asia Deals Barometer Report: Startup funding hits four-month low in August as megadeals play truant

Southeast Asian startup fundraising dropped to a four-month low in August, according to proprietary data compiled by DealStreetAsia, highlighting a continued slowdown in the region since the post-pandemic recovery phase.

Startups in the region raised just $314 million in equity funding last month, down 38% from July, according to the data. The number of deals also dipped by 13% to 46 from a month earlier.

The absence of megadeals — funding rounds worth $100 million or more — continued to suppress the total capital raised in August, with the biggest deal in the month raising a mere $99.86 million.

Last month, the average funding size, based on transactions with disclosed funding amount, stood at $9.81 million, lower than the $12.6 million in the previous month. There were 14 transactions with undisclosed funding amounts in August.

On a year-over-year basis, fundraising in August this year was rosier by about 29% compared with August 2023, when startups secured just $240 million from 44 transactions.

The funding transactions collated in August included venture capital deals, debt funding, corporate funding, and equity crowdfunding deals. Debt deals have not been included since DealStreetAsia has limited visibility into Southeast Asian startups’ debt financing rounds.

The funding amount in August was the lowest since May and the third-lowest recorded so far this year. Equity funding in each of the first eight months of 2024 has fallen significantly short of the psychologically important $1-billion mark.

The last time fundraising in the region crossed the $1-billion threshold was in December 2023, buoyed by e-commerce giant Lazada’s $634-million fundraising from its parent company Alibaba, pushing overall fundraising to $1.2 billion.

Megadeals remain elusive

August’s subdued funding reflects the prolonged slowdown in the region since the end of the COVID-19 pandemic. The biggest funding during the month was the $99.86-million Series B+ round raised by Singapore semiconductor company Silicon Box.

Founded in 2021, Silicon Box’s proprietary interconnection technology connects chiplets in a way that its clients can design flexibly with higher performance and lower energy consumption.

Top Deals of August 2024

The next biggest deals last month only raised $30 million each — the Series B round of fintech lending firm Finture and the seed funding round of wealthtech startup WSPN.

In 2023, Southeast Asian startups raised approximately $7.72 billion in funding from 716 equity deals, with Lazada alone raising $1.9 billion from its parent Alibaba Group.

The annual deal value was down 53% from 2022, while the equity deal volume fell 30%. There were also 41 debt deals that raised a combined $836 million last year.

Singapore leads with $282m in August

Startups in Singapore dominated last month’s funding, raising $282 million across 26 transactions, accounting for about 90% of the region’s total.

The average deal size in Singapore, based on disclosed amounts, stood at $14.1 million, while the largest funding round was sealed by Silicon Box, which secured Series B2 funding led by US-based Prysm Capital.

Indonesia followed with $18.5 million from seven transactions, with the highest deal amounting to $12 million, raised by fleet tracking startup TransTRACK.

Malaysia saw six deals totalling $3 million, while Vietnam recorded three deals worth a combined $4 million.

In the Philippines, two transactions raised $6.6 million, while two startups in Thailand secured undisclosed funding amounts, according to DealStreetAsia’s data.

Fintech tops August funding

Fintech continued to dominate as the leading sector in both funding value and volume. In August, fintech startups collectively raised $106.9 million across 12 deals.

Finture and WSPN led the sector, each securing $30 million, making them the top fundraisers. Five additional fintech deals were closed, though the funding amounts for those transactions were not disclosed.

Software and IT companies saw the second most number of transactions in August, raising $29.1 million in total. However, manufacturing startups raised the second biggest funding at $102.6 million from two transactions, the compilation shows.

E-commerce startups inked four deals that raised $9.49 million in total, while those in the healthtech space saw four transactions which secured a combined $8.49 million.

Investors favour smaller deals

Investors continued to prefer smaller deals in the region, as evident from the scarcity of big-ticket transactions in August. Of the 46 deals last month, 14 were seed rounds, and four were pre-seed transactions. There were also seven Series As and 10 undisclosed transactions.

The largest seed funding was raised by WSPN, a Singapore-based provider of stablecoin infrastructure, which raised $30 million. The round was co-anchored by Foresight Venture and Folius Ventures, with participation from prominent investors.

For the entire month of August, startups were also engaged in three Series B rounds, two equity crowdfunding deals, one pre-Series C round, one debt financing, and one corporate round.