VC funding roars back in 2017, but vital gaps hurt startups: CB Insights data

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On the face of it, VC funding has roared back in Asia this year after a lull in 2016.

As of May 5, VC-backed Asian tech companies raised US$19.3 billion in 458 deals this year, according to venture capital research firm CB Insights. On a quarter-on-quarter basis, funding more than doubled in Q1 2017. And the deal count crossed 300 for the first time since Q1 2016.

Source: CB Insights Asian investment report.

At the current scoring rate, the number of deals will rebound to the 2015 level after a drop last year. Total funding is projected to be more than double that of 2016 and over 50 percent higher than in 2015.

Source: CB Insights Asian investment report.

Taken as a whole, the picture looks rosy. But drilling down into the Asian investment data released today by CB Insights reveals some crucial gaps which are hurting startups.

Series A crunch

Source: CB Insights Asian investment report.

Series A deal share continued to slide, making up just over a fifth of all deals in Q1 2017 compared to one-fourth in the same quarter last year. The struggle to raise a series A round in time has been the undoing of many an early stage startup over the past year.

Seed stage deal share is also down from the Q1 2016 level, but has remained steady at a little over one-third over the last three quarters. It’s at the series A stage that startups are facing a painful crunch.

See: 25 failed startups and what you can learn from them

Late stage bonanza

Southeast Asia trails China and India in deal flow