Exit drought or reality check?

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In focus

• Why Southeast Asia’s startup exits are taking longer
• Why are Western investors missing out on China’s deeptech boom?
• That boom includes robots, too

Hello reader,

“An exit! An exit! My kingdom for an exit!”

With apologies to Shakespeare, that misappropriated line is likely similar to what VCs across Southeast Asia have been crying for the last few years. With disappointing IPOs, unicorns that are flattering to deceive, and a funding slowdown, investors are asking not when they’ll get an exit, but if.

Our first top story today, written by Wavemaker Partners’ Paul Santos, dives into Southeast Asia’s so-called “exit drought” – or more precisely, why it may have been misdiagnosed.

He argues that the region is coming down from the highs of a period when capital outran reality, pulling forward valuations, funding, and expectations but not the outcomes to match. That gap is now starting to close, not because expectations are rising again, but because reality is catching up.

In its place, a clearer, more grounded path to returns is emerging, less reliant on blockbuster IPOs that were never realistic to begin with.

Meanwhile, our second top story comes from Europe-based VC Denis Kalinin, who looks at a market decidedly in its boom phase: China’s deeptech sector.

In this case, the exits are available. This time, the question is whether global investors can access them.

Peter Cowan, engagement editor

Top Stories

1️⃣ Southeast Asia’s startup slump is a reset, not a crisis

Image credit: Arsal Ysfin

Santos argues that amid the 2021 peak of funding for the region, investors backed a combination of weak firms, good companies that raised too much, and a smaller number of promising startups that raised a realistic amount of capital.

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