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Every year , Temasek teams up with Bain & Company on thee - Conomy SEA report . It cover Southeast Asia ’s digital economy and is published by Google . This class ’s report , publish today , underscores what many startup and investors already know — the region ’s funding landscape painting is currently challenging to navigate . On the bright side , there ’s still lot of “ dry pulverization ” give to deploy .
Private funding to digital thriftiness - relate sectors has fall back down to 2017 levels , after hitting phonograph recording highs in 2021 . In the first one-half of 2023 , total funding was $ 4 billion , which means it is very unbelievable to reach the $ 27 billion bring up in all of 2021 . Deal count fall to 564 in the first half of 2023 , compared to 2,697 in all of 2021 . The backing declension bear on all stages of startup , from seed to E+ , and is happen across southeasterly Asian markets .
While the paper allege that the drop in funding is “ in line with global transformation toward the mellow costs of cap and issuance across the funding lifecycle , ” it also remark that Southeast Asia monetary resource have returned less uppercase to investors than investment trust focused on other regions , and startups are under air pressure to show they can be profitable and have clean expiration strategies .
Out of investors surveyed by Bain and Temasek , 87 % said that fundraising had become more challenging , while 64 % said they had seen a pearl in diligence and top - of - funnel activity ; 88 % felt that exit were becoming more difficult .
“ SEA - focused funds have seen significantly lower statistical distribution to pay - in capital compare to other monetary resource that are concentre on other regions , suggesting difficulty in call forth returns for investors , ” said the report . One reason for this is interestingness charge per unit hikes that reduced the number of IPO and listing on regional exchanges . evaluation discounts for secondary also increased .
The digital economic system is expect to touch $ 295 billion by 2025 , but asReuters take down , that figure has been lowered from the appraisal of $ 330 billion given in last twelvemonth ’s e - Conomy SEA report .
On a more pollyannaish note , the report found that “ dry powder ” is on the rise , despite investor caution . There was $ 15.7 billion in private equity and venture capital funds confide ( minus the amount call in for investment ) in 2022 , high than $ 12.4 billion in 2021 .
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In 2023 , Southeast Asia ’s digital economic system gross also arrive at $ 100 billion for the first sentence , growing at 27 % CAGR since 2021 , with e - commerce , travel , ecstasy and media contributing $ 70 billion . GMV is expect to acquire at 11 % to $ 218 billion in 2023 .
In gain , digital payments are becoming more democratic , making up more than half of dealings in Southeast Asia now .
How founder should approach TAM when venture capital is scarce
