Venture capital (VC) deal activity in Southeast Asia soared in 2021 to a record $20 billion, up 1.6x from 2020 and higher than the last peak of $11 billion in 2018, according to a report released by research company Preqin.
The report also noted that there was a strong push in early-stage investments by investors in the region last year. For instance, aggregate value of seed-stage funding grew by 2.1x to $436 million in 2021 from $203 million in 2020.
Series A and Series B also grew by 3.0x and 1.8x, respectively, on the back of a rapidly growing average deal value, according to the report.
This trend continued into the first six months of this year, where as of May 2022 the number of seed stage deals was about 0.5x that of 2021, but the aggregate deal value at $455 million had already surpassed 2021’s $436 million.
Late-stage investments continued to drive the overall value of VC deals last year but the aggregate deal value has grown very little in the past few years for this stage, Preqin said.
Series D and later-stage aggregate deal value in 2021 was $3.5 billion, which was just a 5% increase from 2020 and 3% from 2019.
As with the previous years, the majority of deals that took place in Southeast Asia last year were in Singapore and Indonesia. The two countries accounted for 46% and 37% of the aggregate value in the region, respectively.
However, the report noted that the Philippines and Vietnam posted the fastest growth in 2021 at 6.9x as compared to their past five-year averages.
The Philippines, according to the report, could further see an increase in venture deals due various programs aimed at accelerating digital transformation and innovation. Among others, the e-Government Masterplan 2022 in the Philippines is seen as a catalyst in the growth of venture deals in the country.
The report also highlighted the bustling e-commerce sector in the Philippines. Preqin said the Philippines tops the list globally when it comes to e-commerce retail sales growth in 2022, increasing by 26% compared to Indonesia’s 23% and Malaysia’s 18%.
It is no surprise then that two of the four startups in the Philippines that raised funding in July operate in the e-commerce space, according to data gathered by The Independent Investor.
Dart, a Manila-based quick commerce startup, raised $1.3 million in a pre-Seed funding round anchored by Robinsons Retail Holdings Inc, operator of Robinsons Supermarket, and participated by existing investor Kaya Founders.
B2B platform Packworks also secured $2 million in its Seed funding round co-led by Fast Group and CVC Capital Partners. The startup started out as a solution for multinational companies in the Philippines to connect with neighbourhood stores in 2018. Last year, the company reached 130,000 stores with a GMV of $139 million.
The two other Filipino startups that secured funding in July are Manila-based food-tech company Mosaic Solutions, which pocketed $5 million in its Series A funding round led by Kickstart Ventures, and Gamentis, a blockchain-based gaming startup that raised an undisclosed amount in its Seed round.