Funding deals in SEA tech startups hit record high in H1 2021, report says

Southeast Asia tracked a record number of deals in the first half of the year as investors placed major bets on early-stage investments.

Investors backed 393 deals across the region in the first half of 2021, topping the previous record of 375 deals in the first half of 2019, according to a report by Cento Ventures.

There was a surge in the number of smaller deals under US$100 million in H1 2021, hitting its highest levels at a total value of US$2.4 billion.

This period also marked the first time that exit proceeds through initial public offerings exceeded those from trade exits or secondary sales. Investors made US$288 million through IPO exits, while proceeds from trade exits stood at US$170 million.

Image credit: Cento Research

“We know large digital companies are preparing for their IPOs in H2 2021 onwards,” said Mark Suckling, partner at Cento Ventures, and Laphat Tantiphipop, investment associate at Cento Ventures, in a joint statement. “The potential success of these listings and the exuberant performance of public Southeast Asia tech companies such as the US$2 billion iFast and the nearly US$200 billion Sea Group will encourage many more digital companies to follow.”

On the other hand, the volume of deals worth over US$100 million has been “significantly” smaller compared to the 2018-2020 period. While household names such as Bukalapak and Gojek (before its merger with Tokopedia) each raised over US$100 million, other unicorns didn’t announce major equity rounds.

As a result, the total capital raised by Southeast Asian firms slid by nearly 32% to US$4.4 billion in H1 2021, down from US$5.8 billion a year ago. The H1 2020 figure also saw a decline of over 10% from the previous year.

Image credit: Cento Research

In comparison, other regions such as India, Latin America, and Africa have seen a surge in capital invested in tech firms in H1 2021.