Revisiting a decade of VC funding in SEA

Over the last decade, more than 12,000 startups were founded in Southeast Asia. And behind this boom was an equally explosive wave of venture funding.

Tech in Asia’s data suggests that, compared to 2012, VCs investing in the region in 2021 closed nearly 7x more deals.

And that’s just a sliver of Southeast Asia’s burgeoning VC ecosystem. In this visual story, Tech in Asia examines funding trends in the region over the last decade. Data used in this analysis covers venture funding up to the series J stage.

How far have VCs in SEA come?

Between 2012 to 2021, VC funding rounds and VC funding in Southeast Asia generally flourished. Total funding soared over 180x while VC funding rose slightly over 150x in the 10-year period.

It’s interesting to note however, that VC funding rounds in the region stagnated between 2016 to 2018 and between 2019 to 2020.

Monk’s Hill Ventures partner Lim Kuo-Yi shares, however, that this observation only considers disclosed funding rounds. “There was more capital and investors in the market, and it’s unlikely that funding rounds have not increased between these time periods.”

Another point of interest: While the number of funding rounds have been growing at a relatively constant rate, the total amount of funding skyrocketed sevenfold between 2019 to 2021.

Last year, 45.6% of total funding went to just two companies: internet giant Sea Group and super app Grab. When IPOs and post-IPO funding rounds are omitted, the top 10 companies by amount raised make up close to two-thirds of the total funding dollars in 2021.

That’s not to say VCs left out the rest of Southeast Asia’s startups. In fact, 25 newly minted unicorns raked in more than US$9 billion in funding last year.

Dissecting the data by stage, we find that the increase in funding rounds is largely driven by a surge in pre-series deals. However, this growth appears to have slowed between 2019 to 2021.

For one, the barrier to entry for pre-series funding rounds has gotten considerably higher. In 2012, just 26.4% of pre-series rounds were larger than or equal to US$500,000. By 2021, more than one in two pre-series rounds exceeded that threshold.

Still, 2019 saw a significant bump in pre-series funding rounds from 2018 even as competition intensified. That’s a signal of the ecosystem “maturing” as more startups and investors enter the space, says Saison Capital partner Chris Sirise.

A big bang for big winners

What might the next decade bring?