Private funding for Southeast Asia’s logistics companies rebounded in 2024 after two years of decline, finds the latest report from DealStreetAsia – DATA VANTAGE.
According to the State of Logistics in SE Asia 2024, deal volume in the logistics sector increased 21.4% year over year to 19 transactions in the first nine months of 2024, while deal value surged 83.4% to $95.8 million.
Equity funding for SE Asia’s logistics startups
Indonesia remains the top destination for logistics investment, accounting for 37.7% of the deal volume and 71% of the total deal value in the sector from January 2020 to September 2024. Singapore, while still a significant player, holds a smaller share of 31.9% in deal volume and 14.6% in deal value.
An uptick in dealmaking notwithstanding, the logistics sector continues to grapple with challenges. Late-stage funding has been steadily declining in the segment, indicating investor skittishness about ploughing more capital into larger startups. After a drop in late-stage startups’ share of total logistics funding from 93.6% in 2021 to 37.7% in 2023, there was no late-stage deal in the sector in the first nine months of 2024.
Early- and late-stage funding deal value for logistics startups
Other challenges include growing pressure on startups to demonstrate a clear path to profitability amid an ongoing liquidity crunch. An analysis of over 900 regional companies that filed their financial statements in the last year found only 17% to be profitable, with no logistics firm making the cut.
Revenue growth, meanwhile, has varied significantly in the sector. Emerging players like TransTRACK reported remarkable growth, highlighting scalability among younger companies. In contrast, late-stage firms such as Ninja Van have witnessed revenue contraction.
“Like many in the industry, we have faced the impact of overcapacity due to overinvestment during the pandemic, followed by a correction in recent years. In response, we have rationalised cost structures, focusing on improving operational efficiency and right-sizing capacity,” said Ninja Van CEO Chang Wen Lai.
Consolidation ahead
As the sector guns for profitability and growth, mergers and acquisitions are expected to gain momentum, particularly among last-mile providers affected by the broader e-commerce consolidation in the region.
Between 2018 and September 2024, the region recorded 36 logistics M&A deals involving foreign and domestic acquirers. 2022 was a particularly active year for M&A in the region, with 15 deals closed. The surge in dealmaking was driven by tightening liquidity conditions.
As of September 2024, the regional logistics sector had witnessed four deals this year, matching the previous year’s tally. Among these is Jakarta-based Kargo Technologies’ acquisition of Malaysian logistics platform TheLorry in Q1 2024.
“We anticipate that M&A activities in the logistics sector will increase next year, driven by the need for consolidation and synergies in light of recent market conditions,” said Kargo co-founder and CEO Tiger Fang.
State of Logistics in SE Asia 2024 delves into:
- The current logistics landscape in the region
- Funding trends in the logistics segment
- M&A trends, including top deals in the sector
- Potential IPO contenders in the sector
- Investor and founder perspectives
The report is available exclusively to DealStreetAsia–DATA VANTAGE subscribers. Subscribe/upgrade your subscription now to access our entire set of reports. Still not sure? Opt for a one-month trial for only $249, or contact subs@dealstreetasia.com for a demo.
