In the race for the highest share of venture capital money, Singapore and Indonesia are stealing the show.
According to new statistics from research firm CB Insights, investors more than quadrupled the amount of money they gave to startups in 2021, reaching $621 billion globally and breaking the previous year's record.
Still, according to the report, the United States accounted for over half of global funding, with companies in the country raising around $311 billion. Both the most money raised and the most agreements completed were held by the Silicon Valley region and New York.
London & Partners and Dealroom collaborated on the research.
Bengaluru, which ranked sixth in the world's top global cities for tech VC investment, continued to lead India's tech drive, attracting $18.6 billion.
Overall, Indian tech VC investment increased nearly threefold from $14.9 billion in 2020 to $44.6 billion in 2021, a year when global VC investment reached a new high of $675 billion.
Southeast Asian tech companies, on the other hand, are attracting the interest of investors from all around the world. Startups in the region raised more than $8.2 billion in 2020, nearly four times as much as they did in 2015. This trend continued in 2021, with regional mergers and acquisitions reaching a new high of $124.8 billion in the first half of the year, up 83 percent from the previous year.
Singapore and Jakarta are on the list, according to the CB Insight research
“This year is the coming of age of Southeast Asia’s tech ecosystem,” says Amit Anand, founding partner of Singapore’s Jungle Ventures to Forbes. “Today the region is home to more than 35 unicorns, and many more in the pipeline.”
Anand continue, Southeast Asia has now taken center stage for many investors: "VC investment has expanded 5.2x between 2015 and 2020, compared to [a] 1.4x increase in India and China during the same period." With nearly $10 billion in VC investments in Southeast Asia, the first half of 2021 has already surpassed the entire year of 2020."
"Without a question, the Southeast Asia venture ecosystem has grown tremendously," says Hian Goh, co-founder and partner of Singapore's Openspace Ventures. Indonesia's Gojek, which has since combined with Tokopedia to become GoTo and is valued at over $35 billion, is one of his firm's biggest winners.
As we know Singapore also has established itself as the leader in Southeast Asia for venture capital funds, with tech businesses in the city-state attracting S$5.5 billion in funding over the past year.
According to World Bank research, Singapore is attracting an increasing amount of venture capital and private equity money from Southeast Asia. According to the analysis, since 2014, the city-state has accounted for well over half of the entire aggregate value of deals in Asia, citing a prior report by data platform Preqin.
Singapore accounted for the majority of investments in Southeast Asia. In 2019, the city-businesses state's accounted for around three-quarters of the region's capital, according to the report.
Southeast Asia has become a desirable market for American and Chinese technology companies. Internet coverage in the region is 70%, greater than the worldwide average, and digital adoption is still in its infancy – and the option of digital services like e-wallets and online shopping didn't take off until the epidemic.
With investments in Sea Limited and Lazada, China's Internet giants Tencent and Alibaba were among the first to assist early e-commerce growth in Southeast Asia, and have since expanded their reach into other online verticals. Tencent has invested in Voyager Innovations (PayMaya), SHAREit, iflix, Ookbee, and Sanook, while Alibaba has funded Akulaku, M-Pay (eMonkey), DANA, Wave Money, and Mynt (GCash).
Tech companies from the United States have also recently entered the market. Gojek received a $3 billion Series F investment from Google, Facebook, Tencent, and Visa in June 2020. In October, Google and Temasek Holdings of Singapore invested $350 million in Tokopedia. In 2018, Microsoft made an undisclosed investment in Grab, as well as a $100 million investment in Indonesian e-commerce business Bukalapak.
Source : CB Insight Report, Forbes, Business Times Singapore, Deccanherald.com, Techcrunch.com