In 2022, Southeast Asia’s investment landscape remained stable despite global concerns. A predictable pattern of investments was observed, with a notable influx in the first half and a slight drop-off in the second half of the year. This consistent seasonal pattern was disrupted only in 2021.
However, an interesting shift occurred in the mega deal space, defined as transactions over $100 million. These deals declined in the latter half of 2022, particularly in the $50 to $100 million range, indicating a change in investor focus. Pre-A, A, and B stages remained relatively stable, but the shift caused an overheating effect in Series B investments.
This trend was likely due to global late-stage investors, particularly from North Asia, the US, and South Europe, responding to global dynamics. These investors redirected their focus from mega deals to earlier stages, with Indonesia becoming a particularly attractive destination. However, by year-end, a slowdown in activity from crossover players, late-stage investors, and sovereign funds caused fluctuations in regional valuations.
Surprisingly, Thailand experienced a surge in investor interest, attributed to optimism from Thai and Singaporean investors, and an active crypto community. This led to higher pre-money valuations, defying the regional trend.
Looking to 2023, initial data indicates investments ranging between $1 billion and $2 billion for the first quarter. If closer to $2 billion, 2023 may be a regular year, but if closer to $1 billion, a challenging period may be ahead. Monitoring peer regions like India and LATAM could provide insights into Southeast Asia’s trajectory.
In conclusion, 2022 was a stable year for Southeast Asia’s investments, with shifts in the mega deal category and unexpected growth in Thailand. As we move into 2023, initial data suggests a mixed outlook, making it crucial to observe peer regions for potential insights. Despite challenges, Southeast Asia’s dynamic investment landscape remains resilient with promising potential for growth and innovation.