SE Asia Deals Barometer Report: Startup fundraising crosses $1b for the first time this year in May

Startups in Southeast Asia raised $1.05 billion from 73 transactions in May, the first time that fundraising in the region surpassed the $1-billion mark this year, show proprietary data compiled by DealStreetAsia.

On a month-on-month basis, fundraising in May was up by about 40% from the $751 million that startups in the region raised in April. The amount raised in May, however, was still 31% lower than the fundraising in the same month last year (see chart below).

The uptick in May brings the total amount raised by startups so far this year to at least $3.72 billion from 340 deals. February witnessed the weakest funding activity this year at just $410 million from 55 transactions. The last time startups in the region cumulatively raised $1 billion was in Dec 2022.

At least 21 deals in May did not disclose financial details. Besides venture capital and private equity transactions, the deals included corporate rounds, debt financing, and equity crowdfunding transactions.

For the entire 2022, total funding in the region had dropped 32% to $15.8 billion from 2021’s record highs. Annual deal volume, however, defied the trend, closing 9.6% higher at 1,062, signalling a shift away from big-ticket deals.

Five megadeals

Data compiled by DealStreetAsia show that there were five megadeals—transactions worth at least $100 million—in May, the most so far this year, bringing the total number of megadeals in the first five months of the year to 12.

Singapore-based insurtech unicorn bolttech scored the biggest fundraising in May in a $196 million Series B round anchored by Japanese insurance holding company Tokio Marine. The company entered the unicorn club after a Series A round in 2021.

Vietnamese education group EQuest raised $120 million in fresh funding through a combination of debt from creditors and equity from existing investor KKR’s Global Impact Fund.

In the PE space, Hyosung Chemical announced in May its $120-million investment in Vietnamese subsidiary Hyosung Vina Chemicals Co, a maker of propylene and polypropylene.

Indonesian aquatech firm eFishery and Singapore-based marketing platform also made it to the megadeals table after raising $108 million in Series D and $105 million in PE funding, respectively.

The five megadeals raised $649 million, or about 62% of the total funds in May.

The five megadeals of May 2023

eFishery also crossed a significant milestone in May as it became Indonesia’s latest unicorn after its $108-million funding round. The aquatech firm is valued at $1.26 billion after the latest funding and an increase in its employee share option plan (ESOP) and management share option plan (MSOP), according to calculations by DealStreetAsia – DATA VANTAGE.

In 2022, eight privately-held startups in the region earned the much sought-after unicorn tag. In 2021, there were a record 23 startups in the region that crossed the $1 billion valuation.

Singapore remains funding hotspot

Singapore remains the investors’ favourite in terms of startup funding as companies in the city-state cornered about 52% of the total amount raised in the entire region in May.

DealStreetAsia’s compilations showed that privately-held companies in the city-state raised about $551 million from 41 transactions in the month. bolttech’s $196 million Series B funding and Insider’s $105 million PE round were the top deals.

In April, Singapore-based startups had raised about $491 million from 45 transactions.

Indonesian startups were involved in 14 transactions that raised about $197 million last month. In Vietnam, while there were only 11 deals, the total amount raised was higher than that of Indonesia at $285 million, thanks to the country’s two megadeals, the compilation showed.

eFishery’s $108-million Series D was the highest transaction in Indonesia, followed by the $39 million Series C round of e-commerce startup Evermos.

The value of Vietnam’s fundraising was boosted by two megadeals in the month, EQuest and Hyosung Vietnam, that raised a combined $240 million.

Thailand and Malaysia, while trailing behind, still saw notable activity with two and four deals that raised $1.1 million and $17.4 million, respectively.

Notably, the Philippines saw one investment deal that did not disclose the funding amount—digital bank Netbank’s Series A funding anchored by Singapore-based venture capital investor BEENEXT.

E-commerce, fintech lead among verticals

E-commerce startups were the busiest in May in terms of deal volume while fintech firms scored the most funding amount. According to DealStreetAsia’s compilation, e-commerce first raised $125.5 million from 10 deals while fintech startups raised about $307 million from nine transactions.

In the e-commerce space, Evermos, the Indonesian social commerce platform focused on halal products, raised the biggest amount at $40 million in a funding round anchored by International Finance Corporation (IFC).

Founded in 2018, Evermos connects brands with resellers and customers across Indonesia. The startup targets the Muslim community, which makes up 86.7% of Indonesia’s population.

In the fintech space, bolttech’s $196-million fundraising was the biggest, followed by Advance Intelligence, a Singapore-based AI tech firm that raised $80 million in a round led by existing investor Warburg Pincus and Northstar Group.

Fintech accounted for a third of all private funding last year, up from a quarter in 2021, according to DealStreetAsia DATA VANTAGE’s SE Asia Deal Review: Q4 2022 report. It also accounted for 22% of the deal volume in 2022, down from 31% in 2021 as the easing of COVID-19 restrictions spurred investments in other verticals.

Meanwhile, Software & IT and HR Tech startups were involved in a combined 13 transactions last month that raised an aggregate of $30.4 million while edtech and healthtech scored a total of $161 million from eight deals.

Seed, pre-seed deals continue to dominate

In terms of deal volume, seed and pre-seed rounds continued to dominate in Southeast Asia last month. Based on DealStreetAsia’s compilations, there were 20 seed transactions that raised $59 million and 10 pre-seed deals that secured nearly $7 million in total.

BRIK, an Indonesian business-to-business construction materials aggregator, raised the biggest seed funding in May at $11.35 billion. The startup secured the funding from Indonesia-focused venture capital firm AC Ventures, early- and growth-stage investor Accel India, multi-stage global investment firm B Capital, and early-stage investor Alter VC.

In the pre-seed stage, MPFunds raised the biggest amount at about $1.1 million. The startup, which provides a trader programme, raised fresh funds from an unnamed angel investor.

The month also saw nine Series A, nine Series B, three debt financing, and three PE rounds, besides two corporate rounds, two equity crowdfunding, and two pre-Series A deals. Angel, pre-Series B, Series C, and Series D saw one deal each, while nine transactions did not disclose funding stages.

Most active investors

Indonesia-focused VC firm East Ventures was among the most active investors in May, anchoring at least four deals in the region. The VC firm announced raising $250 million in the first and final close of its latest fund, Growth Plus, in May.

The final close of Growth Plus comes about a year after East Ventures raised a total of $550 million in the final close of its two seed and growth funds. The funds were extended to raise $585 million.

East Ventures was among the most active investors in May, anchoring at least four deals in the region.

Early-stage VC Antler also anchored at least three deals last month in the Series A and pre-seed stages. Last week, the firm said it was moving from early-stage investing to supporting growth-stage startups after raising $285 million for its new Antler Elevate fund.