The Southeast Asian technology investment landscape experienced a dramatic and prolonged contraction throughout 2023 and 2024, according to a new Cento Ventures report, confirming fears that the region was facing the deepest and longest slump of any major emerging market.
Investment activity has not just cooled to pre-COVID levels but has entirely reset the ecosystem to 2016 benchmarks, effectively setting the region back eight years.
The data from the 2023-2024 period paints a stark picture of the reality of the post-frenzy market. By mid-2023, it became unequivocally clear that Southeast Asia had slumped all the way back to the pre-“unicorn era” investment climate. This extended correction has shattered the notion that the 2017-2020 period represented a ‘new normal,’ revealing it instead to have been a singular funding frenzy.
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Investment inflows began slowing in early 2023. While a temporary surge in early-stage deals accompanied this initial slowdown–leading to the second-highest number of deals ever recorded in the first half of 2023, a full-fledged ecosystem reset arrived by mid-2023. Following this inflexion point, the number of deals nosedived, and investment volumes stabilised at approximately 2016 levels for the remainder of 2023 and throughout 2024. In total, US$8.1 billion was invested across 1,186 deals in 2023–2024.
Comparing the activity year-on-year highlights the severity of the drop: deals fell by 54 per cent in 2023 compared to 2022, and capital invested declined by 11 per cent. The slump deepened significantly in 2024, with capital invested projected to fall by 55 per cent and deals expected to drop by 65 per cent compared to 2022 figures.
Emerging markets leave Southeast Asia behind
The correction is particularly striking when juxtaposed against the performance of peer emerging markets. Southeast Asia was the first emerging market to dip below its 2017-2020 baseline in the second half of 2022, and it has remained stuck below that level for more than two and a half years.
Meanwhile, rival regions, India and Latin America (LatAm), have significantly outpaced the region’s recovery. By the second half of 2024, all emerging regions, excluding Southeast Asia, had considerably rebounded, consistently staying above their 2017-2020 baselines. India and LatAm, in particular, exceeded these baselines by a factor of 2x. In a massive shift of capital flows, India was pulling in four times the capital and LatAm twice as much capital as Southeast Asia by the second half of 2024.
It is worth noting that the pre-slump baseline for Southeast Asia was exceptionally high; the region took more capital in an average half-year period between 2017 and 2020 than either India or Latin America. However, the region is now lagging significantly behind both rivals.
Mega-deals recede to historic lows
The severe decline in large financing rounds was a key driver of the overall capital contraction. The mega-deal category–deals of US$100 million or more–hit historic lows in 2023–2024. The total value of mega-deals during this two-year period amounted to US$2.1 billion, which is less than half of the peak value of US$5.3 billion reached in the second half of 2021 alone.
Mega-deals did not vanish entirely but became highly concentrated in “flight to quality” bets. These deals were often anchored by major local conglomerates or significant digital groups, such as LineMan GXS, ANext, Bolttech, Mynt, and Ascend. Additionally, internal capital injections from tech giants like Sea Ltd, ByteDance, and Alibaba sustained several operations.
Strategic investors also remained active; North Asian financial institutions such as Mizuho and MUFG continued to provide late-stage capital, often concentrating their funding in digital banking ventures.
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A few exceptions stood out: eFishery alone absorbed 10 per cent of the total mega-deal funding in 2023-2024 (which was shutdown following allegations of embezzlement), and notably, accounted for the entirety of late-stage digital investment from Middle Eastern funds in the region. Beyond Kredivo, however, most of the mega-deal rounds went to affiliates of larger corporate groups.
Despite these scattered signs of life, mainly reappearing in the Digital Financial Services (DFS) sector, the regional rebound is trailing badly behind its peers. Even in the most optimistic scenario, Southeast Asia is anticipated to be at least a year behind the recovery curves witnessed in India and LatAm.
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