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VC financing in technology companies decreased by approximately 79% between 2022 and 2024, from about $ 10.1 billion to approximately $ 2.2 billion, the Data Intelligence Platform reports.
Coumar | Istock | Gets the image
Usually, venture capitalists have a strong risk appetite, but some investors in Southeast Asia are becoming more careful.
“I think there is a huge flight to security,” said Aaron Tan, co-founder and CEO of used carro car markets, Cnbc.
He added that some LCD investors in the region now choose “safe rates” that demonstrate profitability rather than typical high growth startups.
“I see a lot of investment these days or something is a little concerned about (in) what I (think) is not a company that can be presented because … they are really offline,” he said.
Venture capital or private capital?
Over the past two years, this shift has become more obvious as some venture capital investors have moved their attention from more risky startups in the early stages to companies that are more installed, insiders reported.
Now venture funds are becoming PE.
Aaron so
Co -founder and CEO, Carro
“Now venture funds are becoming PE funds,” said Tan Corro. Instead of seeking 100 -point profitability, which is traditionally for venture capital firms, some VC investors are going 3 times or 4 times, which is more characteristic of private capital, he added.
“You see much more investment by the traditional VC funds in what I call bricks and construction enterprises,” said CNBC Jeremy Tan, co-founder and partner in Tin Men Capital.
“At best, they are technological businesses, huh? Under this I mean that you have an app, you have a loyalty interface, but outside this, (you) still setting up physical shops … and can they deliver the same refund profile?
From logistics companies, restaurants, shops and even farms, some LCD investors allocate most of their capital with the traditional sector and enterprise, but without military breasts or type of involvement, characteristic of private firms.
In Southeast Asia, the Venture Capital Nossed Investment since 2022. VC financing in technology companies decreased by approximately 79% between 2022 and 2024, with approximately $ 10.1 billion to approximately $ 2.2 billion, according to the Data Intelligence Tracxn platform.
Meanwhile, the financing of the VC investors in the autonomous, non-technological sector business has also decreased and less than 61% over the same period, from about $ 1.3 billion to approximately $ 527.7 million, TRACXN reports.
Startup -Baraba southeast Asia
All this happens against the background of the ecosystem that goes through the kryun.
The industry insiders say many startups in the region remain unprofitable. At the same time, many funds in Southeast Asia raised too much money and did not bring proper profitability to their investors, also known as limited partners.
“A lot of LCD have raised too much money, so? So you don’t have enough space for deployment, and I think they just try to find out how to return to their investor, for LPS,” said Tan Tan Men.
In addition, “macroeconomy is very weak, whether in Indonesia, whether in Thailand, even in Singapore … (and) in this part of the world there is a clear lack of exit,” said Tan Corro.
Exits – which offer investors a way to withdraw their money and profit from their investments – were small in the region. In particular, many southeastern Asia companies listed, at best provided “unsuccessful” outputs for investors, Tan Carro said.
“Not many good (technology) transactions that need to be done in this part of the world,” said Tan Corro. Many startups remain overstated, and the evaluation correction has not happened yet, he added.
“(Many) funds here have fastened their hopes for IPO,” Tin Men said. However recent market turbulence has led to many startups to Detain their public lists.
The startups serving southeastern Asia are also faced with unique problems, as the economy is the aggregation of different countries with different languages, cultures, normative conditions and more. “So, the likelihood of large companies (in the region) is much lower than in the US,” said Tan Tin Men Capital.
“So, as a result, investors ask, ‘Where’s the money? “… What, after all, is the question that we arise is that LPS (with limited partner) is not interested in investments now,” said Tan Carro.
Way forward
Meanwhile, some investors say that the businesses that work both offline and on the Internet or atoms and bits, respectively, are best competed.
“We believe that companies in South -East Asia, which have real moves (sustainable competitive advantages) are atoms,” said Inglan Tan, which was founded by the partner of the partner in Insignia Ventures Partners.
“If you are pure bits, I think about major software companies such as Microsoft and Facebook, not much moat, but if you have … logistics, local licenses, you have local offline moat, you are usually more resistant to external competition,” said Tan Insignia.
In other words, businesses that own both the Internet and offline can be more elastic than the companies that depend on only one.
One way to do this is to find what you can “consider as a traditional business, but (injection) II to make it more effective, increase profitability, optimize profits, open new products and have an online expression,” said Tan Insignia.
“I claim that the era is just the search and the passive investment has disappeared. You need to create.”
