Southeast Asian tech startups raised $8.2b in 2020 despite Covid-19 impact

Southeast Asian tech startups raised investments of about US$8.2 billion in 2020 despite the pandemic’s impact, according to a report by Singapore-based firm Cento Ventures. The amount of funding received by the region’s startups was almost identical to the same period in 2019.

Photo credit: rakchai / 123RF.

The total number of deals in Southeast Asia stood at 333 in 2020, with “mega deals” from household names including Grab, Bukalapak, and Traveloka as well as Gojek and Go-Pay accounting for about 50% of the year’s total investment volume.

According to Cento Ventures, mega deals have a value size higher than US$100 million, which attract the majority of investment proceeds. However, smaller deals that occur frequently can be a better indicator of the ecosystem compared to outsized deals that vary the trend, says the venture capital firm.

Tech investments in Southeast Asia / Image credit: Cento Ventures’ FY2020 report

Smaller deals in Southeast Asia within the range of US$50 million to US$100 million hit a record investment volume at US$1.1 billion, marking a 26% increase from 2019.

“2020 confirmed the reversion to the typical geographic distribution of deals,” said the report. About 70% of capital was invested in Indonesian startups, with startups in the country and Singapore combined accounted for 64% of the total number of deals done.

Over half of the tech investment flowed into super apps and online retailers, totaling just over US$4 billion in 2020. Other sectors that saw rising demand include payments, logistics, and local services.

See also: Southeast Asia’s golden age: Resilience and recovery

The proceeds generated from exits in 2020 fell significantly to under US$1 billion on the back of extensive due diligence required by international acquirers. However, Cento Ventures anticipates resumed growth in VC investment and some notable exits in 2021 if the pandemic recedes during the year.