Miguel Cordon · · 2 min readSEA tech winter continues as Q1 funding drops 29% year on year
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Southeast Asia’s tech landscape is still feeling the funding crunch: the region’s startups collectively raised just US$1.2 billion in the first quarter of 2024. That’s over 29% lower compared to the same quarter last year, and an 82.6% drop versus Q1 2022, according to Tech in Asia data.
The Q1 2024 figure is also a drop compared to Q4 2023. This reverses the momentum that Southeast Asia was building up in the past year, as there had been consistent quarter-on-quarter growth since Q1 2023.
That said, Q1 2024 had 182 deals, which is an improvement over the previous quarter’s 144.
Q1 2024’s numbers come despite some notable signs of recovery in Southeast Asia last year. In Q4 2023, the region’s startups banked a total of US$4 billion – the largest amount since Q2 2022, when startups raised US$3.9 billion.
Still, some experts expect this slowdown in capital to permeate throughout 2024 as well, and overall, 2023 was not a great year for the region’s VC funding landscape. The year saw the lowest total amount raised since 2018 and had the second-lowest number of deals.
Aligning with a recent report from January Capital, this decline was mainly due to a decrease in later-stage funding, which typically fetches higher investment amounts. Quarter on quarter, however, there was a slight increase in amount raised for series B through D funding rounds in Q1 2024.
A recent analysis from PitchBook also showed heightened pressure for both investors and mature startups, with cash returns getting more difficult to come by amid tightening regulations over startup listings. This also comes despite Southeast Asia logging over a 56% growth in total gross domestic product, the report noted, citing data from the International Monetary Fund.
Looking at the numbers geographically, Singapore remains the region’s financial center, leading with US$867 million in funding raised. This was also corroborated by both the PitchBook and January Capital reports.
It was followed by Indonesia’s US$152 million, which was a steep drop from Q4 2023’s US$2.5 billion. That said, the country saw more deals in Q1 2024 compared to the previous quarter.
Editing by Putra Muskita and Lorenzo Kyle Subido
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