SEA logistics sees M&A, greentech action amid funding lull

This is the latest version of the article that was previously updated on September 1, 2022. Since then, we’ve added several startups and new funding rounds to the list.

In Southeast Asia, the prolonged tech winter has affected the logistics and ecommerce enabler industries, which typically assist traditional brands in going online.

So far, only ecommerce analytics firm AMP has successfully raised funding this year. The company, which operates in Singapore, secured a US$12.7 million investment from Openspace Ventures and OneVentures.

Last year, no startups in these two sectors received equity funding exceeding US$10 million. Regional logistics firm Ninja Van managed to secure US$50 million but in the form of a revolving credit facility from HSBC in October 2024.

Still, many startups received early-stage funding last year, particularly greentech logistics firms such as Indonesia-based Dash Electric and Blitz Electric, as well as the Philippines’ Mober. All three are logistics enablers offering electric vehicle fleets.

However, amid these rounds, a price war is intensifying in the logistics sector in Southeast Asia, especially on ecommerce platforms.

The business model of third-party logistics (3PLs) players is also increasingly under threat as ecommerce firms expand their in-house delivery units, which include Shopee’s SPX Express and Lazada Logistics.

In-house vs. 3PLs

Last year, more than half of Shopee’s orders were delivered through SPX Express. In Sea Group’s most recent earnings call, founder and CEO Forrest Li also highlighted SPX as one of Shopee’s key advantages.

The in-house logistics arm, he said, provides “geographic reach, fast delivery speed, and cost leadership.”

One of the major reasons SPX has gained so much traction is its lower pricing. To secure a share of ecommerce platform shipments, 3PLs have no choice but to lower their fees to compete.

J&T Express, for instance, has been aggressively cutting prices. The company can afford to do this thanks to its strong capital backing, having gone public in 2023 and previously securing billions of dollars from venture capital funding.

The logistics firm achieved its first annual profit last year, but it is likely to face significant challenges this year. Its partnership with Shopee in Indonesia has just ended, potentially leading to a substantial loss in shipment volume.

Indonesia is J&T’s second-largest market after China, with 4 million packages delivered daily across the archipelago. Shopee, which held a 40% market share in the country in 2023, appears to be one of J&T’s biggest sources of shipment volume.

Ecommerce enabler expansion

Funding is going down