In September, we saw many developments that challenged our perception of how the pandemic is affecting tech investment in SEA. While it is true that some markets are experiencing a decline, such as Vietnam in H1 2020 based on a report by early stage venture firm Do Ventures, last month e27 published at least 24 funding news coverage.
Of the popular sectors, fintech took the top spot in September with funding announcements from companies working in various branch of the vertical. Examples of these funding rounds include B2B cross-border payments network Thunes, P2P lending firm eLoan, insurtech platform Sunday and PasarPolis), digital wealth management platform Syfe, digital payments platform MyMy, robo-adviser BigBrainBank, and digital payments platform JazzPay.
Another popular sector includes e-commerce (with Freshket’s US$3 million funding and iPrice’s Series B), logistics (with Webtrace and Waresix), ride-hailing (EMDDI), AI (Beyond Limits and Flow), proptech (Livspace, PropertyGuru), and edutech (Edukasyon).
There were also funding announcements from unlikely sectors such as vertical gardening (Aerospring), on-demand caregiver (Homage), air purifier (uHoo), media platform (Asumsi.co), coworking space (WORQ), parking platform (JomParkir),
The month also highlighted the rise of potential new unicorns, with Carousell stealing the show with its US$80 million funding round.
What about the big guys such as gojek and Grab? According to report by DealStreet Asia, merger talks between the two tech giants had “gained steams over the past few months”. However, it is also said that a core group of the Grab management strongly opposes the idea and is interested only in an Indonesia-only merger.
Beyond the potential merger, Bangkok Bank acquired one per cent stake in gojek while Grab was in talks with Prudential, AIA for fintech investment.
What does this say about the ecosystem?
The theme of digital transformation, which dominated the SEA startup ecosystem in August, continued its reign in September. This is particular apparent in the funding allocated for the fintech and e-commerce verticals; as the market adjusts to lifestyle changes as dictated by the New Normal, companies are embracing opportunities in the sector.
It is also interesting to see how the pandemic did not seem to affect companies’ expansion plan, as seen in the case of Homage and iPrice.
If we look at the verticals that had announced their funding rounds, beyond e-commerce, fintech, and logistics, we noticed that there was a greater variety compared to the previous months. This variety even included coworking spaces, part of the real estate industry, which has been seen to be struggling during the pandemic.
It seemed that investors were starting to look beyond the pandemic and the possibilities that a New Normal might bring.
What is next for the ecosystem?
Every month, we look at the latest development in the global tech startup ecosystem that might influence trends in the SEA ecosystem. For example, months before, we took a look at how Ant Group’s upcoming IPO is going to influence fundings in the digital payments sector in Indonesia.
Also Read: Peaking in 2019, tech investment in Vietnam drops by 22 per cent in H1 2020 due to COVID-19
In September, we took a look at how the IPO of Peter Thiel-backed Bridgetown has offered an alternative path to exits and liquidity for SEA startups.
Known as a special purpose acquisition company (SPAC), Bridgetown is an example of a company with no commercial operations that is formed strictly to raise capital through an IPO to acquire an existing company, as per a definition given by Investopedia. The concept has not been very popular in SEA, but it provides many benefits such as faster process and less legwork to IPO.
Many investors that we interviewed for the piece agreed that Bridgetown’s IPO will open door to more similar moves in the ecosystem.
—
Image Credit: Bram Naus on Unsplash
The post Tech investment in September: Baby unicorn, vertical gardening, and an alternative path for liquidity and exits appeared first on e27.