2022 was the turning point for global tech investment. Startups and big techs were laying off employees, and cutting down costs across all areas. There have been some concerns in the community: “Are we seeing a downturn or a hard landing? Have priorities changed for the region’s tech investors and companies? And are there more opportunities out there or have we hit a plateau?” 

In collaboration with Cento Ventures, we are releasing the  Southeast Asia tech investment 2022 report, which aims to paint an accurate picture of the region’s investment scene, as well as key trends and narratives.

The report is available in English and Chinese. Download your copy here.

On top of the report, we are also hosting an online sharing session entitled “On stranger tides: Southeast Asia Tech Investment in 2023 ” on 12 May 2023. Sign up here! 

Here are some highlights of the report:

  1. Business as usual despite the global tech downturn?

With US$ 10.4B going into Southeast Asia’s tech ecosystem, 2022 was the third strongest year on record. Southeast Asia did not see an abnormal deficit of digital investment capital until the very end of 2022 despite the souring capital market’s mood towards tech globally.

 

2. Similar investment volumes, different investment priorities

Global late-stage investors powering Series C+ and mega deals categories were in retreat, redirecting their effort towards investment stages as early as Series B and then nearly leaving the market altogether.

Regional and North Asian investors remained present across late-stage deals, bringing mega-deal activity down to 2016 levels and Series C+ to late 2019 levels.

Funds managed by SEA investors have accumulated enough dry powder to keep Series A-C going at a usual volume, with a slowdown visible only in the very last weeks of 2022.

The valuation landscape changed sharply through the year, with Series B valuations most volatile – Indonesia’s Series B valuations surged as global players retreated into earlier stages; Series B valuations in Vietnam have come down steadily from the exceptional heights of 2021.

 

3. Battle of narratives and search for the next growth story

As the search for the next regional growth story began, the Philippines’ investment volume overtook that of Vietnam. The narratives of Vietnam’s “Next China” and the Philippines’ “Next Indonesia” were being tested against each other. 

 

4. Best year for exits on record, with four $500m+ exit deals

Despite the weak performance of tech stocks globally, Southeast Asia delivered the best year for exits on record, with 4 liquidity events generating more than $500M in proceeds each – GOTO and BELI IDX IPOs; 2C2P and Coda Payments transactions.

The top quartile median exit valuation has continued its steady rise from under US$ 100M in 2018 to nearly US$ 0.5B in 2022, setting a new benchmark for the value of a well-built regional digital platform.

 

5. The Work Must Continue: digital financial infrastructure upgrade

Digital financial services remained the key investment theme for the region, representing 46% of overall 2022 liquidity, 43% of all 2022 equity funding, and responsible for billions in private credit facilities lined up to support an array of non-bank lenders across the region.

As private credit grew more sophisticated and available, investment into digital financial services shifted from powering lending facilities and user acquisition to upgrading the key financial infrastructure of the region, with payments value chain and capital market systems being primary beneficiaries.

 

More insights

The Southeast Asia Tech Investment 2022 report is available in both English and Chinese – download your copy today. 

Momentum Works and Cento Ventures are also hosting an online sharing session entitled “On stranger tides: Southeast Asia Tech Investment in 2023 ” on 12 May 2023 to give you the inside perspective on trends in tech investment, and what to expect for the rest of 2023 as well as the next five years. 

Sign up for the event here! 

 

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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].