While Singapore and Indonesia have historically been the dominant markets, Vietnam and the Philippines are rapidly gaining ground, attracting significant seed funding and fostering a thriving ecosystem, according to a new report by Jungle Ventures.
The ‘The First Cheque Report 2024’, which analyses seed investment rounds between 2021 and Q3 2024, shows that Singapore continues to lead in terms of deal count, capturing 54.4 per cent of all seed deals in Southeast Asia. This is largely attributed to the country’s favourable policies for entrepreneurs, attracting businesses targeting markets beyond Singapore’s borders.
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Indonesia holds the second position with 19.2 per cent of seed deals. However, the report highlights a significant trend: other Southeast Asian markets, particularly Vietnam and the Philippines, are catching up.
In the first half of 2024, Vietnam and the Philippines, along with other emerging Southeast Asian markets, collectively surpassed Indonesia in capital deployed for the first time. This signifies a shift in investor focus and highlights the growing potential of these emerging markets.
Several factors contribute to the rise of Vietnam and the Philippines.
Vietnam’s robust economic growth, coupled with a young and tech-savvy population, makes it an attractive destination for startups. The government’s proactive measures to support the startup ecosystem, including funding initiatives and incubator programs, further fuel this growth.
The Philippines, with its large English-speaking population and a burgeoning digital economy, offers a fertile ground for startups. The country’s growing middle class and increasing smartphone penetration present a vast market opportunity.
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The report acknowledges the role of local seed funds, micro-VCs, angel groups, and corporate investors in driving the growth of the startup ecosystem across Southeast Asian countries. This diversification of funding sources is indicative of a maturing entrepreneurial landscape.
The emergence of Vietnam and the Philippines presents a compelling narrative of the evolving startup landscape in Southeast Asia. As these markets continue attracting investment and nurturing innovation, they are poised to reshape the region’s economic future.
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