Southeast Asia’s (SEA) healthtech and life sciences startup ecosystem is experiencing a significant funding downturn, with 2024 marking the lowest funding year in the past seven years, says a Tracxn report.
Despite a robust ecosystem of over 3,600 companies, only 322 have received funding to date.
Total funding for SEA healthtech and life sciences startups reached a low of US$123 million in 2024, a drastic 79 per cent drop from US$599 million in 2023, and a staggering 90 per cent decrease from US$1.1 billion in 2022.
Singapore dominated the region, accounting for 75 per cent of the funds raised with investments worth US$92 million in 2024. This funding contraction reflects a broader trend across Asia, which saw an 11 per cent drop in funding compared to the previous year.
Also Read: Rise of the machines: 20 robotics startups shaping Southeast Asia’s future
Several factors contributed to this decline, including macroeconomic uncertainties and geopolitical tensions, which have made investors more cautious.
Late-stage funding experienced an 87 per cent decrease, with only US$28.9 million raised in 2024, down from US$224 million in 2023. Early-stage funding also saw a steep decline, reaching US$77.6 million, a 77 per cent decrease compared to the US$339 million secured in 2023. Seed-stage funding was also affected, with total funding in 2024 at US$15.9 million, down 56 per cent from US$35.8 million in the previous year.
The second quarter of 2024 was the highest-funded quarter of 2024, raising US$41.2 million, a 63 per cent decrease from the US$109.8 million secured in the same quarter in 2023.
The first half of 2024 accounted for 57 per cent of the total funding in the sector.
HealthifyMe, a fitness and wellness platform, secured US$20 million in a Series C round, becoming the highest-funded company. Biobot Surgical, a developer of surgical automation devices, raised US$17.9 million in a Series B round.
Unlike previous years, 2024 did not witness any US$100 million-plus funding rounds.
Among the top-funded segments, employee health IT received US$26.5 million in funding, while the neurology sector saw total funding of US$22.7 million, a significant development as it had not recorded any funding in 2023. The fitness & wellness tech segment secured US$20 million, representing a 293 per cent increase compared to the US$5.1 million raised in 2022.
IPO activity also declined, with only two recorded in 2024, a 33 per cent decrease from the three in 2023. However, acquisition activity saw an upward move, with eight acquisitions in 2024, double the number in 2023.
Also Read: From fintech to IoT: Southeast Asia’s standout startups with the largest funding rounds in 2024
Despite the funding downturn, the healthtech and life sciences sector is still considered to have good potential, driven by digitalisation and evolving consumer needs. Initiatives like the MedTech Innovator Asia Pacific Accelerator Program continue to support startups. The sector’s focus on technological advancements and healthcare transformation suggests promising long-term prospects.
The post Funding drought in SEA healthtech: 2024 marks worst year in seven years appeared first on e27.