Funding for SE Asian startups plummets further in Q3

Funding for SE Asian startups plummets further in Q3

Photo by Ussama Azam on Unsplash

The third quarter of this year saw Southeast Asia’s startups ink the fewest private funding deals in six years, finds the latest report from DealStreetAsia – DATA VANTAGE.

Regional startups recorded 134 equity deals in Q3 to raise a total of $979 million in the July-September quarter, reveals SE Asia Deal Review: Q3 2024. This is the first time since 2019 that quarterly proceeds have fallen below the $1-billion mark.

Due to the weak Q3 performance, the deal volume in the first nine months of 2024 stood at 474—the lowest since 2020. Meanwhile, the year-to-date funding of $3.26 billion is less than half the capital raised in the same period in 2020, highlighting the region’s prolonged funding slowdown amid challenging global conditions.

While equity funding lost momentum in the first nine months of this year, debt financing gained ground. Debt deals witnessed a 6% increase in deal count to 35 and a 62% jump in value to $1 billion during the period.

Source: DealStreetAsia – DATA VANTAGE

Dealmaking dropped across funding stages, but the decline was more steep in the late stages. Early-stage funding proceeds dipped marginally to $2.4 billion in the first nine months, while late-stage funding plunged by 73.6% to just $850 million. The decline reflects increased investor wariness of capital-intensive, unproven business models amidst ongoing economic uncertainty and tighter liquidity.

On a positive note, the report suggests that the pressures of asset revaluation are showing signs of easing, particularly in deals through Series C. In the first nine months of 2024, the median value of seed deals increased year over year, while the Series A median remained largely steady. Series B deals saw the largest uptick in median sizes, the report notes.

Source: DATA VANTAGE

Indonesia among worst performers, e-commerce loses momentum

In the first nine months of the year, Indonesia reported 71 equity deals, down 28% year on year, with total funding plunging 66%. This made the country the second worst performer after Vietnam, which recorded a 79% drop in funding during the same period.

Indonesia’s contribution to Southeast Asia’s total deal value fell to 11.6% in the first nine months, down from 19.4% in the same period last year. Meanwhile, Singapore maintained its dominance as the top funding destination in the region, contributing nearly two-thirds, or 65.6%, of total funding sealed as of September.

The decline in funding in the archipelago is mirrored in the fortunes of e-commerce startups. The vertical, once an investor favourite, recorded 30 deals worth $295 million in the first nine months, with 78% of the proceeds coming from a capital injection in Lazada by parent Alibaba. This marks a decline of 44.4% in deal volume and 81.7% in value from the same period last year.

Fintech held its top spot among verticals, raising $1.1 billion in equity funding from 111 deals. The value of fintech deals declined 12.8% year on year, a substantial rebound from the steep 68.4% drop seen in 9M 2023. Startups specialising in decentralised finance (DeFi), or blockchain-powered fintech, accounted for 45% of the total fintech deal volume and 28% of the total deal value. This underscores the growing prominence of blockchain-based solutions in Southeast Asia’s fintech ecosystem.

Source: DATA VANTAGE

Funding outlook

In an interview for the report, Indelible Ventures managing partner Kevin Brockland said that while the remainder of 2024 is expected to remain tight, the market will likely begin loosening up in 2025. The trend is already evident in other markets, such as the US.

“Valuations have now normalised, although not all of the pain (down rounds and failures) has fully been realised. A reversion to normalcy on valuations will also help liquidity as many buyers were simply priced out by inflated valuations,” he noted.

Achmad Zaky, the co-founder of publicly listed e-commerce firm Bukalapak and now leader of Indonesia-based VC firm Init-6, said he sees plenty of opportunities in Indonesia, especially in the consumer and fintech sectors. “We see significant growth potential in these industries, driven by increasing consumer demand, rising digital adoption, and evolving financial services,” he said.


The SE Asia Deal Review: Q3 2024 report has extensive data on:

  • Quarterly fundraising trends
  • Median and average deal values across funding stages
  • Deal volume and value for top sectors
  • Fundraising performance of each SE Asian market
  • Perspectives from fund managers

Unlock the report for only $299 or upgrade to a Premium Plus subscription for greater savings and enjoy full access to up to 36 research reports a year, all for just $1200 ($100/month). Still not sure? Opt for a one-month trial.

Edited by: Deepshikha Monga

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