Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Quarterly Report: SEA Tech - Q3 2023. The report, based on Tracxn’s extensive database, provides insights into the SEA (Southeast Asia) Tech space.
The SEA Tech startup ecosystem received its highest funding in Q4 2021 after which there has been a steady decline in funding in the region, with a minor spike in Q2 2023. Q3 2023 has seen a big drop of 74% in quarter-on-quarter (QoQ) funding, making it the lowest funded quarter in the last five years. The market for investments remains volatile globally and similar trends can be seen in the SEA region as well.
The SEA Tech startup ecosystem Q3 2023 raised a total of $835 million, a huge 74% drop from $3.2 billion raised in Q2 2023 and a 66% decline from $2.5 billion in Q3 2022. This space attracted late-stage investments worth $395 million in Q3 2023, a massive 85% drop compared with $2.55 billion raised in Q2 2023 and a decline of 57% compared to $922 million raised in Q3 2022.
The third quarter of this year witnessed early-stage funding worth $329 million, a fall of 37% compared with Q2 2023, and also a drop of 75% compared with Q3 2022. A downward trend was observed in seed-stage rounds as well in Q3 2023, which saw funding of $111 million, a 17% drop compared with Q2 2023 and a 58.4% drop from Q3 2022.
Food and Agriculture Tech, FinTech and Life Sciences were the three segments that received the highest funding in the third quarter of 2023. The Food and Agriculture Tech segment secured funding of $248 million in Q3 2023, which is a growth of 75% from $142 million raised in Q2 2023. However, this is a drop of 40% compared with Q3 2022.
FinTech is also one of the segments that took a hit, with funding worth $236 million in Q3 2023, which is a drop of 46% and 73% from Q2 2023 and Q3 2022, respectively. Retail, InsurTech and Auto Tech were most affected, falling 98%, 73% and 66%, respectively, compared with Q2 2023.
There were no new entrants to the Unicorn club in Q3 2023. The number of acquisitions rose slightly from 20 in Q2 2023 to 22 in Q3 2023. Only one company from the overall SEA Tech space went public in Q3 2023.
East Ventures, 500 Global, and Wavemaker Partners were the most active investors in this space in Q3 2023. East Ventures, Northstar Group Investible and were the top seed-stage investors in Q3 2023, while Peak XV Partners, Patamar Capital and Genting Ventures were the top early-stage investors in Q3 2023. EDBI and Astra Digital were the most active late-stage investors in Q3 2023
Despite the challenges, there is considerable optimism in the region’s long-term growth, owing to factors such as the young population, large consumer base and its dependency on informal financial and commercial systems that provide a large number of untapped opportunities to both investors and entrepreneurs.
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