Southeast Asia’s startups end blockbuster 2021 with $25.75b in total funding By Andi Haswidi January 20, 2022 Southeast Asia’s fledgling startup ecosystem had its best year ever in 2021. Aided by excess liquidity globally, private investments in homegrown companies reached $25.75 million last year as the region minted more unicorns than ever before. Venture-backed companies in the region collected at least $23.18 billion in equity funding and another $2.57 billion in debt financing, according to DealStreetAsia – DATA VANTAGE‘s SE Asia Deal Review: Q4 2021 report. One in every four dollars invested last year went to fintech. Driven by the rising adoption of e-payments and decentralised finance (DeFi), fintech startups raised $5.83 billion in funding – four times the amount in 2020 – and generated roughly one-third of total deal volume in 2021. DeFi was the largest fintech category in terms of deal count last year as investors moved to capture the gold rush in cryptocurrency and non-fungible tokens. The combined value of equity funding into DeFi—excluding GameFi, which is classified under gaming in the report—grew five times larger relative to a year before. The Class of 2021 Last year, Southeast Asia welcomed 25 new startups that had surpassed $1 billion in valuation. This is more than the total number of unicorns minted in all previous years combined. Source: DATA VANTAGE Singapore-headquartered Bolttech achieved the feat at its Series A round, making it the fastest growing insurtech company globally. The region also minted its first unicorn in the DeFi space when crypto exchange Matrixport announced its $100 million Series C round in August. Just as important, Vietnam-based Sky Mavis became the first GameFi startup globally to reach unicorn status, thanks to the popularity of its play-to-earn monster pet game Axie Infinity, which had amassed more than 2.5 million subscribers by the end of December. Overall, the 25 new unicorns command at least $55 billion in combined valuation and received more than $9 billion in funding in 2021. Singapore contributed most with 10 unicorns, followed by Indonesia (7). Malaysia, the Philippines and Thailand welcomed their first unicorns last year, while Vietnam added two more to its tally. Fintech generated 11 unicorns last year, while e-commerce and logistics generated four and three, respectively. The region also welcomed its first edtech and F&B unicorns in Singapore-registered Emeritus and Indonesia’s Kopi Kenangan. Cautious optimism Although venture funding is expected to remain strong in 2022, funds managers are approaching the new year with some caution. An anticipated monetary tightening across major economies to combat rising inflation will impact the global liquidity pool, industry insiders told DealStreetAsia. “Given that new funds continue to be raised and more foreign funds are progressively taking interest in Southeast Asia, it is unlikely that funding will dry up significantly,” said Yinglan Tan, the founding and managing partner of Insignia Ventures. Fluctuations quarter to quarter are to be expected, Tan said, especially across markets and verticals as trends wax and wane. Golden Gate Ventures partner Justin Hall said an extraordinary influx of capital had been the biggest driver behind fundraising this year and last, but fundraising is unlikely to dry up. “I think we will be approaching a cautious slowdown as investors, especially institutional LPs and later-stage investors, wait and see how the forecast rate hikes in the United States and Europe will begin affecting capital allocation and expected returns,” said Hall. Jessica Huang Pouleur, a partner at Openspace Ventures, said quality startups will continue to see robust funding in 2022. The next phase of growth, however, will be more prominent in markets like the Philippines and Thailand, she concluded. The SE Asia Deal Review: Q4 2021 report covers fundraising by startups in the fourth quarter and the previous year, including data on: fundraising performance across countries and sectors deal-making data across funding stages valuations and sectoral trends industry experts’ views on what to expect in 2022 The report is available exclusively to DealStreetAsia – DATA VANTAGE subscribers. Subscribe/upgrade your subscription now to access our entire set of reports.
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