SEA Demonstrates K-SHAPE RECOVER and Emergence of New Investment Trends

The South East Asia (SEA) region has demonstrated its resilience yet again in the wake of the global shock following the outbreak of the pandemic. White Star Capital (an investment firm) in early 2020 had predicted that, SEA would be the No.1 region for VC investment this decade, following four unicorns being added two years ago.

Attractive fundamentals across demographics, key economic indicators and the continued interest from VC investors has made SEA the leading choice for investment activity. A heads-up to this was visible in 2018, when 5,066 deals, the second-highest after North America, worth $81 billion were made in Asia. True to the prophecy, till around the H12020, SEA-focused VC firms had raised $1.33 billion in capital commitments in Q12020, over 3 times during the same period a year ago. SEA-based VC firms had US $4.2 billion in capital and out-of-region VCs coughed up US$1.6 billion.

Out of the US$1.33 billion raised in Q1, US $ one billion came from SEA-based fund managers. Singapore and Indonesia garnered fund closings of US$865 million and US$161 million respectively. This is largely attributed to the VCs receiving the capital committed by investors before the region tightened its social-distancing norms in April. They were also well capitalised and with ample arsenal of dry powder. Vietnam, Malaysia, Thailand and Cambodia did not record any closes. Reportedly, some 42 SEA-based VCs were looking for US$4.9 billion, while another 11 VCs outside the region were looking to raise US$1.2 billion. This was the scenario prior to the full-impact of the pandemic being reflected in the numbers.

2020 IN RETROSPECT