The funding landscape in Southeast Asia in 2023 started poorly but ended on an upward trajectory as the region ushered in a new year. According to data from DealStreetAsia and multi-stage investment company Rigel Capital, startup fundraising halved to USD 7.96 billion, with venture deals dropping by 30% from 2022’s numbers. 

By the fourth quarter (Q4) of 2023, there were emerging signs that investing would stabilise, with deal volumes increasing by 10.6%. Thus, closing 167 deals ended the three-year trend of only getting 151 investments over the line in the third quarter. eCommerce giant Lazada spotlighted a flailing venture capital market as it accounted for nearly a quarter of all equity money-backing in the region.

Here are 5 funding trends for startups in Southeast Asia to watch out for in 2024

The Rigel report showed that global macroeconomic headwinds were responsible for the reduced capital inflows in the Association of Southeast Asian Nations (ASEAN). There was geopolitical strife, slower economic growth rates, investor caution, and a deceleration in momentum in industries like financial technology (fintech) and eCommerce. Furthermore, climate change and sustainability concerns have become a global issue, affecting how firms deploy investments and which companies receive funds.

Nevertheless, investors have predicted a fundraising rebound in 2024 as nations digitise and adopt new economic policies. Let us take a closer look at the top-funded startups in Southeast Asia:

Kredivo

Fintech company Kredivo delivers digital financial services to Indonesians. It gives customers instant credit financing for eCommerce, offline purchases, and personal loans. In April 2022, Kredivo partnered with Mastercard and Bank BNI to launch a virtual card called Infinite Card for paying on eCommerce and other online platforms.

The company sealed a USD 270 million Series D deal led by Japanese global bank Mizuho Bank, Ltd., which contributed USD 125 million. Kredivo’s other investors included Square Peg Capital, Jungle Ventures, and Naver Financial Corporation.

Bolttech 

Singapore’s Bolttech is an insurance technology (insurtech) company that provides a leading tech ecosystem for insurers and their distribution partners. It delivers its award-winning digital insurance and protection capabilities to Asian and European countries. 

Bolttech aims to connect people and enhance financial inclusion while embracing ESG (environmental, social, governance) policies. This approach enables them to build a sustainable and ethical business. The company recently raised USD 246 million in a Series B round from LeapFrog Investments, MetLife, Tokio Marine, and Khazanah Nasional. 

Carsome 

Malaysia-based Carsome is a used-car eCommerce platform where buyers and sellers can trade vehicles. The cars are inspected thoroughly and have a one-year warranty and a five-day money-back guarantee. Plus, the prices are fixed with no hidden fees. Buyers can test drive their potential new rides any day of the week after making an appointment and selecting a time. 

Carsome raised USD 607.4 million in funding over 15 rounds from EvolutionX Debt Capital, 65 Equity Partners, Qatar Investment Authority, Gobi Partners, and others. It aims to continue digitising the used-car industry in Malaysia and other countries, such as Indonesia.

Thuocsi 

Vietnam-based Thuocsi is a platform for sourcing and distributing pharmaceuticals for doctors, pharmacists, and hospitals. By connecting the manufacturers and distributors to the end users—such as pharmacies—the company helps them save time researching and finding much-needed drugs. Furthermore, it removes the need to buy medicines in bulk by allowing smaller order sizes.

Thuocsi raised USD 51.5 million in a Series B funding round. Its parent company is BuyMed, and its investors include Cocoon Capital, UOB Venture, U.S. International Development Finance Corp, and Smilegate Investment.

eFishery 

Indonesia’s eFishery is an aquaculture company that focuses on breeding and harvesting fish and aquatic plants like water lilies. Farming in water provides a dependable and sustainable method for dealing with Southeast Asia’s food poverty issues. The company also gives farmers access to the digital economy through affordable aquaculture tech solutions.

DealStreetAsia mentioned that eFishery raised USD 200 million in a Series D round. In May 2023, the company became a unicorn after a USD 108 million funding round. The new funds came from Abu Dhabi’s 42XFund, Malaysia’s public sector pension fund called Kumpulan Wang Persaraan (KWAP), and Switzerland-based asset manager responsibility. Additional investors included venture capital (VC) firms 500 Global, Temasek, and others.

Fundraising expectations for 2024 

Speaking to DealStreetAsia, Guo Sun Lee, partner at international law firm King & Wood Mallesons, said, “The stage is set for there to be a favourable recovery in dealmaking and fundraising if the unfavourable conditions of the preceding year prove transient.” 

Startups in Southeast Asia are innovating and have restructured their operations to cope with the reduced investment funds of previous years.

According to a webinar by venture capital firm 1982 Ventures, Southeast Asia is recovering and has returned to pre-pandemic levels. It also remains an attractive market and can overcome the challenging funding environment. Many sectors like fintech have immense growth potential, meaning the region will always provide profitable investment opportunities for VC firms.