SE Asia Deals Barometer Report: Megadeals lift startup funding to $1.1b in Sept—up 126% from Aug

Startups based in Southeast Asia raised $1.1 billion in September, up 126% from August, and marking the third time this year that fundraising has crossed the $1-billion mark, show proprietary data compiled by DealStreetAsia.

There were 53 deals recorded in September, with the top three transactions raising a combined $621.5 million, or 56% of the total deal value. That compares to the 49 deals that raised a mere $486 million in August.

On a year-on-year basis, fundraising was up by about 48% from the $750 million raised in September 2022.

In May 2023, startup fundraising crossed the psychologically important $1-billion mark for the first time this year at $1.05 billion. Funding value again surpassed the billion-dollar mark in July at $1.78 billion, the highest so far this year (see chart below).

The deals compiled by DealStreetAsia include venture capital, debt financing, private equity, and corporate rounds. There were 8 transactions that did not disclose the funding amount in September.

The uptick in September brings the total amount raised by startups so far this year to at least $7.53 billion from 582 transactions. For the entire 2022, total funding in the region had dropped 32% to $15.8 billion from 2021’s record highs.

Three megadeals account for over half of the total deal value

Compared with just two megadeals—transactions worth at least $100 million—in August, Southeast Asia managed to produce three big-ticket transactions last month that raised a combined $621.5 million, or 56% of the total money raised in the period.

The three megadeals—all of which were raised by Singapore-based startups—bring the total number of such transactions so far this year to 22.

Singapore insurer Singlife topped the megadeals table after it secured $374.7 million in debt financing in September. In the same month, Aviva agreed to exit its joint venture with Singapore Singlife by selling its 25.9% stake to Sumitomo Life Insurance Company for around $1 billion.

StorHub Self Storage Group, a Singapore-based self-storage platform, also secured S$180 million (about $132 million) sustainability-linked loan from CIMB and UOB last month, the second-highest in terms of deal value.

Founded in 2003, StorHub is one of Asia’s leading self-storage platforms with facilities spanning over 6.4 million square feet of gross floor area (GFA) and more than 70,000 storage units across Australia, Greater China, Japan, Malaysia, Singapore, and South Korea.

Another Singapore-based startup, green hydrogen project developer InterContinental Energy (ICE), raised $115 million in its Series B funding round from sovereign wealth fund GIC and clean hydrogen industry-focused investor Hy24.

ICE, which operates out of Singapore, Australia, and the Middle East, said the new funds will go towards accelerating the deployment of its green hydrogen-related projects based on upstream wind and solar energy systems.

Megadeals of Sept 2023

In August, there were only two megadeals that raised a combined $200 million. The month of May posted the most number of megadeals so far this year at five, but the total amount raised was only about $649 million that month.

No startup in Southeast Asia made it to the unicorn club in September and only one company has earned the tag so far this year—eFishery, which entered the three-comma valuation club after its $108-million funding round in May.

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

Singapore takes the lion’s share of regional funding

Singapore continued to reinforce its position as a regional hub for startups and investments in September as it accounted for about 83% of the total money raised last month.

Data compiled by DealStreetAsia showed that startups based in the city-state bagged $878.5 million from 33 transactions, leading the pack in terms of deal volume and value, in September. In August, Singapore startups raised $233 million from 27 transactions.

The average deal size in Singapore last month was $31.4 million. Five deals did not disclose financial details.

In Indonesia, 14 transactions raised a combined $147 million last month, up from August’s 10 deals that raised $106.6 million in total. The deals were led by dairy products manufacturer KIN Dairy’s $70-million investment by Singapore-based PE firm Growtheum Capital Partners.

Amartha Nusantara Raya (Amartha), Indonesia’s largest micro-financing lending platform, also secured a $25-million loan facility from Dutch development bank FMO to provide micro-loans to borrowers, directed towards female borrowers and/or women-owned micro-enterprises.

The Philippines and Vietnam saw two transactions each last month, raising $30 million and $23.4 million, respectively, while Malaysia’s two funding deals did not disclose the amount raised.

Fintech is the top sector by deal volume

DealStreetAsia’s compilation showed that the financial technology sector continued to attract the most funding in the region in September, clocking 10 deals that raised $494 million in total. In August, too, the sector had topped the list with 10 transactions that secured a combined $256.1 million.

Singlife’s $375-million debt financing was the top deal in the sector last month, followed by the $50-million Series B funding of insurtech startup Boltech.

Healthtech secured seven deals, raising $78 million in total. Vietnam’s Gene Solutions scored the highest amount at $21 million in Series B, followed by Singapore’s WhiteCoat and Awak Technologies, which secured $20 million each.

Greentech startups signed five transactions that raised $147 million in total. Green hydrogen project developer InterContinental Energy raised $115 million in its Series B funding round to top the sector last month.

E-commerce also saw five deals that raised about $60 million, led by e-commerce platform AMP’s $18.5 million Series A fundraising.

Early-stage investments in favour

A closer look at the 53 funding stages last month showed that investors continue to favour early-stage deals, with seed stage funding getting the most interest, in terms of deal volume.

In September, there were 12 seed-stage transactions that raised a combined $41.3 million in funding. Singapore-based game studio GamePhilos Studio raised the largest seed funding last month at $8 million from Xterio, Animoca Ventures, SevenX Ventures, and Chain Hall Capital, among others.

The month also saw nine series B, seven Series A, five pre-seed, and two pre-series A rounds. There were also six debt fundings, three corporate rounds, and one private equity deal—KIN Dairy’s $70-million investment from Growtheum Capital Partners. Eight transactions did not disclose their funding stages.