SE Asia Deals Barometer Report: Startup funding hits three-month high of $498m in March

Startups in Southeast Asia garnered approximately $498 million in funding in March—a 28% increase from the previous month and the highest amount raised so far this year, according to proprietary data compiled by DealStreetAsia.

However, the funding decline was stark on a year-over-year basis, dropping by about 36% from March 2023, when startups secured approximately $780 million from 76 transactions.

Funding in each month in the first quarter of 2024 fell significantly short of the psychologically important $1 billion mark (see chart below). Fundraising in the region last crossed $1 billion in December 2023 when the $634 million that e-commerce giant Lazada pocketed from its parent company Alibaba buoyed overall fundraising to $1.16 billion.

There were 63 funding transactions in March—the same as in February—including venture capital deals, private equity, debt financing, and convertible notes. Nineteen transactions did not disclose their funding size.

The average deal size, based on the transactions with disclosed funding sizes, stood at $11.3 million in March 2024, up from $8.6 million in the previous month.

The fundraising pattern in March underscored the cautious approach from big-ticket investors. Large cheques were scarce and only one megadeal—i.e. transactions worth $100 million or more—was registered in the month. The second biggest deal in March was valued at only $44.9 million.

There were no megadeals in January or February this year in Southeast Asia.

Top deals in SE Asia in March 2024

The biggest deal in March was the $100 million in debt financing that Indonesian fintech company Akulaku secured from London-based HSBC. The Alibaba-backed firm said it will use the funds to settle some of its outstanding debts. Established in 2016, Akulaku is a multi-finance company offering services like Buy Now, Pay Later (BNPL), consumer credit, and digital banking.

In full-year 2023, startups in Southeast Asia had raised about $7.72 billion in funding from 716 equity deals, with Lazada alone raising $1.9 billion last year from its parent Alibaba Group. There were also 41 debt deals in 2023 that raised a combined $836 million.

This compares with $15.82 billion and $1.97 billion raised from equity and debt deals respectively in 2022.

Singapore, Indonesia remain top funding destinations

The investment activities in March were predominantly concentrated in Singapore and Indonesia. Data compiled by DealStreetAsia showed that Singapore continued to lead with the highest number of transactions, totalling 39 deals that collectively raised over $212 million.

The figures compare to the 44 deals that raised about $287 million in February, representing an 11% decline in volume and a 26% drop in value, month-on-month.

Twelve of the Singapore deals in March did not disclose financial details. The average deal size in Singapore, based on the transactions with disclosed funding sizes, stood at about $7.9 million, down from about $9 million a month earlier.

Singapore’s biggest deal during the month was only valued at $27.5 million—the Series B funding of data analytics firm Atlan. The funding round was led by Salesforce Ventures and backed by WaterBridge Ventures, Grace Software, Peak XV Partners, and AT13 Fund.

Indonesia, on the other hand, while hosting fewer deals at 11, managed to secure a significant share of the funding pie last month, accumulating about $219.76 million. The total funding value was buoyed by the month’s only megadeal—Akulaku’s $100 million debt financing.

Indonesian insurtech Qoala raised $47 million in its Series C funding round co-led by PayPal Ventures and MassMutual Ventures, to become the second biggest deal in the country in March.

In Malaysia, privately held companies were involved in five funding transactions that raised a combined $26.5 million while in the Philippines, two deals generated $31 million in total funding.

Malaysian PV system installer STS raised the largest funding in Malaysia in March at $19.3 million in debt financing from Bank Islam. In the Philippines, grocery chain Dali Discount attracted $25 million from Venture Partners.

Vietnamese startups secured $8.5 million in combined funding from five transactions while Thailand saw one deal that did not disclose the funding amount.

There were no reported deals in Myanmar during the month.

Fintech continues to stand out

Startups in the financial technology (fintech) sector drew $262.4 million across 16 deals in March, underlining investors’ appetite for the ongoing digital transformation of the region’s financial services. In February, too, fintech was the top sector, attracting $102.6 million across 15 deals.

Akulaku’s $100 million debt financing was the largest for the sector during the month, followed by Qoala’s $44.9 million Series C funding.

Jakarta-based AwanTunai, a fintech startup that offers a POS financing solution, also closed its Series B round at $27.5 million in March, anchored by global banking groups and sovereign investors.

Other technology-oriented sectors in the region also saw notable activity, with Software & IT and Data Analytics/AI raising $50 million and $30.35 million, respectively, underscoring the crucial roles these sectors play in the technological advancements in Southeast Asia.

Consumer Products companies raised $29.2 million from three deals. Notably, Healthtech and Greentech sectors, despite being essential for sustainable development, attracted considerably lower funding amounts at $25.1 million and $19.3 million, respectively.

E-commerce, which was one of the most funded sectors during the global pandemic years, only managed to raise about $2 million last year from three deals.

Investors prefer smaller deals

Data compiled by DealStreetAsia reveals a continuous pattern—seed funding remains the most prominent funding stage in the region, with 19 transactions, in March.

The largest seed funding went to Morph, a fully permissionless Ethereum Virtual Machine Layer 2 for value-driven dApps. The Singapore-based startup secured $19 million in a seed round anchored by crypto-focused venture investor DragonFly Capital.

Besides the 19 seed rounds, March also saw 10 Series A rounds, 6 pre-seed rounds, 5 Series B rounds, 3 debt financing rounds, 2 corporate rounds, 2 Angel rounds, and one each for Series C, private equity, pre-Series B, pre-Series A, debt, and convertible note rounds. Ten transactions did not disclose funding stages.

Last year in Singapore, early-stage deals continued to drive the transactions, accounting for 94.1% of the total deal volume and 49.8% of the deal value, up from 89.9% and 43.7%, respectively, in 2022, a report from DealStreetAsia and Enterprise Singapore showed.