Southeast Asia startup scene shows signs of maturing as 2018 funding hits new high

Funding for Southeast Asian startups has set records once again, hitting US$10.9 billion in 2018.

Pulled from the Tech in Asia database, last year’s tally blew past 2017’s high of US$7.86 billion, marking a 38 percent growth. However, that’s much slower than 2017’s 211 percent climb on-year.

Tech in Asia’s data shows more money than ever going into late-stage rounds – a trend that started to become evident in 2017.

“The region is definitely maturing,” says Gobi Partners’ founding partner Thomas Tsao. “It’s a continuation of the upward trend we’ve seen and a sign of a healthy growing market.”

Albert Shyy, principal at Burda Principal Investments, offers the same view. “I kind of see last year as an extension of the trend where there’s some maturing of the funding environment and a lot of investors are going into later-stage, investing in unicorns in particular.”

2018 was dominated by mega rounds for four of the region’s popular unicorns – Grab, Lazada, and Indonesia’s Go-Jek and Tokopedia – which amounted to a combined US$7.09 billion.

Private equity funds like KKR have also joined VCs and corporates in this year’s roster of startup investors.

“Southeast Asia has sort of always been on the radar of PE funds, but there just hasn’t been that many opportunities for them to invest in. Companies that take US$100 million, US$200 million-plus checks are where most of the bigger funds would kind of minimally need to invest – that’s becoming more feasible,” says Shyy.

Early-stage funding – from seed to series A – remained robust. Growth-stage investments also recorded tremendous growth.

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