Asia
ECONOMY | Staff Reporter, Singapore
view(s)

Internet economy funding in SEA poised to break US$50b target by 2025: report

The region’s nine unicorns lured US$16b in investments between 2013 and 2017.

After raising a staggering US$9.1b in investments in the first half of 2018, internet economy firms in Southeast Asia increasingly appear on track to meet and even break their US$40b-US$50b funding target by 2025, according to Google and Temasek’s joint e-Conomy SEA report.

The record US$9b raised in H1 2018 brings the funds received by internet economy companies in Southeast Asia to US$24b in less than four years, the report stated. Of this, US$16b went to Southeast Asia’s nine internet unicorns: Grab, Lazada, Razer, Sea Group, Go-Jek, Bukalapak, Traveloka, Tokopedia and VNG.

Internet economy companies headquartered in Singapore and Indonesia continued to snap up the lion’s share of regional funding, bringing in a total of US$16b and US$6b respectively since 2015.

“Amongst them, Grab took the lion’s share, raising more than US$6b and becoming the first Southeast Asian decacorn, joining a league of less than 20 privately held companies globally valued over US$10b,” the report’s authors said.

Also read: Grab may be spreading itself too thin as it guns for dominance in Southeast Asia

Go-Jek, Lazada and Tokopedia on the other hand successfully closed billion-dollar funding rounds, whilst Razer and Sea Group successfully tapped into public markets to fund their growth plans in 2017, the e-Conomy SEA report highlighted.

Also read: M&As seal the endgame for Singapore's graduating startups

Overall, the ride-hailing sector alone attracted more than US$10b worth of investments in the last three years, mainly dominated by Singapore’s Grab and Indonesia’s Go-Jek, the report explained.

“Ride hailing players have deployed these funds building their online transport business, more recently accelerating investments to grow in online food delivery and digital payments, as well as through acquisitions and partnerships in a quest to become Southeast Asians’ ‘everyday apps’,” the research noted. 

Whilst unicorns captured most of the capital attention, the overall startup ecosystem benefitted from growing investor appetites, the Google-Temasek research added.

More than 2,000 internet economy companies in Southeast Asia secured investments with companies valued at less than US$1b attracting almost US$7b collectively in the last three years.

“Amongst them, the most dynamic segment was that of companies valued between US$10m and US$100m,” the firms said. “The bedrock of the internet economy, these companies have raised US$1.4b in H1 2018, already eclipsing the US$1b they received in all of 2017.”

Singapore and Indonesia continued to account for the lion’s share of deal activity with more than 1000 and 500 deals closed in the region, respectively.

“Yet, internet economy companies headquartered in Malaysia, Philippines, Thailand and Vietnam also enjoyed a burgeoning deal flow, with more than 800 deals completed in total,” the research highlighted. “After a stagnant 2017, when the number of deals remained almost flat from a year earlier, investment activity has picked up dramatically.”

The report is a multi-year research project that aims to shed light on Southeast Asia’s internet company by covering four key sectors: online travels, online media such as gaming and subscription music, ride hailing in terms of transport and food delivery, and e-commerce. The research covers the six largest markets in Southeast Asia, namely Indonesia, Philippines, Malaysia, Singapore, Thailand and Vietnam. 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.