SE Asia Deals Barometer Report: Startup fundraising falls 17% MoM in July

Startup fundraising remained subdued in Southeast Asia in July due to the absence of large-ticket deals.

At $504 million, the value of funding deals in the region last month was down 17% from June, according to proprietary data compiled by DealStreetAsia. There were 53 deals in the month, compared with June’s 46 transactions.

The absence of megadeals—funding rounds worth $100 million or more—suppressed the total capital raised in July despite the increase in deal volume. In June, startups had secured about $601 million in funding, supported by three megadeals.

On a year-over-year basis, the funding decline was even more pronounced, falling by about 64% from July 2023, when startups secured approximately $1.4 billion from 62 equity transactions, DealStreetAsia’s compilation showed.

The funding transactions collated in July included venture capital deals, private equity investments, and a corporate funding round. Thirteen transactions did not disclose their funding size. Debt deals have not been included since we have limited visibility into Southeast Asian startups’ debt financing rounds.

Last month, the average deal size, based on transactions with disclosed funding amount, stood at $12.6 million, lower than the $22 million in the previous month.

Equity funding in each of the first seven months of 2024 has fallen significantly short of the psychologically important $1 billion mark (see chart below).

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.

July’s subdued funding underscores a cooling investor sentiment, evidenced by a hesitance to write big cheques. In fact, the biggest funding in July was the $80 million Series B round secured by the Philippines-based proptech startup Lhoopa.

Hi-P International, a Singapore-based advanced manufacturing service company, also secured an investment worth about $74.1 million from Temasek-backed 65 Equity Partners.

The top deals of July 2024

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 continues its perch on top

In July, Singapore continued to take up the bulk of Southeast Asia’s funding, both in value and volume, DealStreetAsia’s data showed.

Startups in the city-state raised $166.5 million in total, accounting for about 33% of the entire funding in the region, DealStreetAsia’s compilation showed.

Hi-P International’s $74.1 million PE investment was the biggest in Singapore last month, followed by the $35 million Series B1 funding in Temasek-backed blockchain payments network Partior.

The average deal size in Singapore last month, based on deals with announced amounts, was only a mere $9.8 million. Four deals did not disclose the amount they raised.

In Indonesia, startups secured a total of $151.7 million in equity funding from seven transactions. The biggest deal in the country was the $73.2 million in additional investment that digital banking player PT Super Bank Indonesia secured from its shareholders Grab, Singtel, and KakaoBank.

Malaysian startups were involved in at least 12 deals in July but the transactions only raised a total of $12.9 million.

In the Philippines, four deals led to a funding total of $94 million, including Lhoopa’s $80 million Series B—the top deal in Southeast Asia in July.

Startups in Thailand raised $41.6 million from three deals while those in Vietnam secured $37 million from five transactions. In Myanmar, one equity funding took place but the amount raised was not disclosed.

Fintech leads in SE Asia

Financial technology (fintech) continued to be the leading industry in Southeast Asia with $121.7 million invested in July, accounting for about 24% of the total money raised in the month.

The largest fintech deal in July was the $73.2 million investment in Indonesian digital bank PT Super Bank Indonesia, followed by Singapore-based Partior’s $35 million Series B1 funding.

Proptech / property startups raised $90 million in total while manufacturing secured $74.1 million in aggregate funding. Startups in the software & IT sectors signed deals worth $71.4 million while green tech firms raised $65.4 million from three transactions.

Logistics & Supply Chain startups inked $22.5 million worth of investments while healthtech / health & wellness banked $17.9 million in total.

Seed and pre-seed rounds dominate

Investors continue to prefer smaller deals in the region, as evident in the scarcity of big-ticket transactions in July. In fact, of the 53 deals last month, 14 were Seed rounds and 10 were Pre-Seed transactions. Ten transactions did not disclose funding stages.

The largest seed funding was raised by Masa Research, a Singapore-based AI startup, which raised $7.2 million. Hive Health, a Philippines-based digital health insurance company, also secured $6.5 million in its Seed funding round backed by Gentree Fund, BEENEXT, and Y Combinator.

July also saw 6 Series A rounds, 5 Pre-Series A rounds, 4 Series B rounds, two PE rounds, 1 Series C round, and 1 corporate round.