Similarities betwen Southeast Asia’s and Latin America’s tech investment ecosystem?

Is Southeast Asia’s tech ecosystem having some similarities with that of Latin America? That was a point raised during an online briefing Momentum Works hosted together with Cento Ventures last week. 

At the briefing, “Disruption – following the money flow”, Jianggan Li, CEO of Momentum Works and Dmitry Levit, General Partner of Cento Ventures, analysed and interpreted some key insights from the Tech Investment in Southeast Asia 2020 report. 

The two regions, both of diverse numbers of countries, experienced, and managed, the Covid-19 crisis differently. Both showed resilience in tech and venture investment – with Southeast Asia only experiencing minor drops, while Latin America had a drop in deals but healthy growth in amount. 

If we look into the two regions in a little bit more detail, we will find many similarities: large neighbour to the north, six major economies, population and GDP of the six, and VC investment in total in 2020. One key difference is – Latin America countries are much dispersed from each other: 

And now Shopee is in both markets ^_^ 

Of course, the briefing, attended by more than 100 people, is about Southeast Asia. The region has been growing for a decade in two fronts: ecommerce and digital entertainment. The chart below took the data from the Google Temasek Bain e-conomy report. 

The last instalment of the e-conomy report did not predict the Covid-19 pandemic. In 2020 both sectors surged, and you can see that from the proxy of SEA Group’s market capitalization: 
We also noticed that many of the companies in Southeast Asia valued above US$100 million are either directly in digital finance or having distribution of financial services as a key business area: 

In the fintech areas, we actually see some similarities again between Latin America and Southeast Asia – this time in the percentage of total investment that went into fintech sector. We also find it interesting about the high percentage in Europe, and the extremely low percentage in China can be explained in the recent crackdowns. 

We also interpreted some key trends of fintech sectors, including the continuous growth in payments and the national payment systems built by India, Thailand and Brazil: 

We finished the presentation by looking at the predictions Momentum Works had made for the year, and how they have been faring since we are already in the 2nd quarter: 

The Q&A section was also particularly interesting, which we will share more detail in a subsequent post on TLD. 

The Tech Investment in Southeast Asia 2020 report, as well the presentation deck used for the briefing, is available for free to industry stakeholders. If you are interested in getting a copy, please email us: [email protected].