According to Data Intelligence Intelligence Plations, financing by VC Investors in technology -based companies dropped by about 79% in 2022–2024, from around $ 10.1 billion to around $ 2.2 billion.
Koumaru Istock Getty images
Venture Capitalists usually have a strong risk appetite, but some investors in Southeast Asia are becoming more and more cautious.
“I think there is a huge flight in a safe CNBC.
He added that some VC investors in the region now choose “safe factories” that show profitability, not typical high growth technological startups.
“Nowadays I see many investments-what is a bit worried about me (in) what (I think) are not companies related to the undertaking, because … they are really offline,” he said.
Venture or private equity capital?
This change has become more visible in the last two years, because some Venture Capital investors have concentrated from more risky startups for later companies that are more grounded, according to outsiders.
At the moment, enterprises are becoming the EP funds.
Aaron yes
Co -founder and general director, Carro
“At the moment, enterprises are becoming the funds of the EP,” said Carro Tan. He added that instead of striving for 100 times returns, which is traditional for Venture Capital companies, some VC investors choose 3x or 4x, which is more typical in private equity.
“You see many more investments of traditional VC funds in such a brick companies,” said CNBC Jeremy Tan, co-founder and partner at Tin Men Capital.
“At best, these are companies that support technology, right? It means that you have an application, you have a loyalty interface, but besides (you are) you are still configuring physical stores … and can they provide the same return profile? I think it's a question mark,” added Tin Men Capital.
From logistics companies, restaurant chains, multi -branch shops and even farms, some VC investors spend more of their capital on traditional sectors and companies, but without war chest or a type of operational involvement typical of private equity companies.
According to Southeast Asia, Venture Capital investments since 2022. Funding by VC Investors in technology-based companies have dropped by about 79% between 2022 and 2024, from around $ 10.1 billion to around $ 2.2 billion, in accordance with the Intelligence Tracxn data platform.
Meanwhile, the financing of VC investors on the company's offline, apart from technology, also fell-although less-o 61% in the same period, according to TRACXN from around 1.3 billion to around USD 527.7 million.
Startups from Southeast Asia
It is all against the background of the ecosystem that goes By Wringer.
Industry experts say that many startups in the region remain unprofitable. At the same time, many funds in Southeast Asia collected too much money and did not provide adequate returns to their investors, also known as limited partners.
“A lot of VC collected too much money, right? So you lacked places to implement, and I think they just try to come up with how to return for their investor, for LPS,” said Tin Tin Men Capital.
In addition, “Makro's economy is very weak, whether in Indonesia, whether in Thailand or even in Singapore … (I) there is a lack of exit in this part of the world,” said Carro Tan.
Exits – which offer investors a way to withdraw money and profits from investment – were rare in the region. In particular, many of the letter from Southeast Asia, which was mentioned, was provided only by “weak” outputs for investors, said Carro Tan.
“There are really not so many good (technologies) offers to perform in this part of the world,” said Tan Carro. He added that many startups remain overstated, and the valuation correction has not yet occurred.
“(Many) funds here attracted their hopes for IPO,” said Tin Men Capital's Tan. However, the last market turbulence has led to many startups Delay their public offers.
Startups for Southeast Asia are also facing unique challenges, because the economy is an aggregation of different countries of different languages, cultures, regulatory and other environments. “Thus, the probability of building large companies (in the region) is much lower than the US,” noted Tin Men Capital.
“As a result, investors ask:” Where is the money? “… which at the end of the day – the problem we have at hand is that LPS (limited partners) are not interested in investing now,” said Carro Tan.
Path forward
Meanwhile, some investors say that both offline and online and atoms and bits are best to compete.
“We think that companies in Southeast Asia, which have real moats (balanced competitive benefits), are atoms,” said Yinglan Tan, founding partner at Inagnia Ventures Partners.
“If you are a pure bit company, I think there is not so much moat against main software companies, such as Microsoft and Facebook, but if you have … logistics, local licenses, you have local offline moats, you are generally more resistant to external competition,” said Tan Insignia.
In other words, companies that have both online and offline resources can be more resistant compared to companies that are dependent on one.
One way to find it is to find what can be “perceived as a traditional business, but (injection) of artificial intelligence, increasing the margin, revenue optimization, open new products and online, offline,” said Tan Insignia's Tan.
“I say that the era of finding and passive investing has disappeared. You must co -create.”