It’s that time of the year when we look back to see how things went, particularly in the startup ecosystem.

The general mood has been somber when it comes to funding. Globally, as well as in Southeast Asia. Given the uncertain macroeconomic conditions, investors in the region held tightly onto their purses, relaxing their grip mostly for their new favorite sectors like AI, deep tech, healthtech, and climate tech aside from their evergreen darlings like fintech, enterprise applications, and retail.

Obviously, the overall money that flowed into the region didn’t reach anywhere near the glorious figures of the last couple of years.

In line with the global funding scenario, the Southeast Asian technology startups received a total funding of US$4.3 billion between January 1, 2023, and December 5, 2023, a 65% drop from US$12.4 billion raised in the same period last year, shows data from Traxcn.

The early-stage funding for tech startups stood at US$1.9 billion in this period. In a not-so-good sign, late-stage tech startup funding also reached just US$1.9 billion. Only ten funding rounds were worth US$100 million and above compared to 28 such rounds in 2022. Meanwhile, seed-stage investments fell as well by 52% to US$546 billion.

On the bright side, the early-stage deals have grown significantly in size, as per a report by Prequin. The average deal size for seed rounds rose 112% between 2019 end and October end 2023.

In the same period, the average deal size for Series A has gone up 31%, while Series B and Series C increased by 87% and 53% respectively. However, the average Series D round size went down by 50%.

For investors, it is valuation concerns and poor exit conditions that make early-stage deals more attractive than late-stage deals, as per Prequin. They are thus preferring to invest more in fewer (but better quality) early-stage deals.

There is no dearth of money for them after all. Data collated by Tech in Asia shows VCs raised US$13.34 billion for Southeast Asia and India in 2023, compared to US$9.79 billion in 2022. This means VCs have raised more dry powder this year than last year.

For founders, that means shifting their mindset to creating sustainable revenue streams and charting the path to profitability early on rather than chasing after growth at all costs. And that is a valuable lesson startups learned the hard way this year.

On that note, let’s dive into this week’s recap.

Buzzing Deals

This week, we had some large deals spread across the funding landscape.

• Hong Kong-headquartered travel experiences platform Klook has bagged a US$210 million round led by Bessemer Venture Partners. The development comes as the travel industry bounces back and heads to its pre-pandemic glory days. Moreover, the company said it achieved profitability for the first time this year. The nine-year-old company witnessed an annualized gross booking value of US$3 billion in 2023, which led to a 3x increase in revenues this year over 2019. Klook will use the fresh funds for product innovation, marketing, and AI integration.
• Singapore-based healthtech firm Doctor Anywhere has landed a US$40.8 million check in a series C1 extension round led by Square Peg and Novo Holdings. Founded in 2017, Doctor Anywhere provides on-demand healthcare services, which gives its 2.5 million users across Southeast Asia access to primary care, specialist care, and telehealth facilities. The company plans to use the new capital to build a vertically integrated digital healthcare ecosystem and expand its services focused on secondary care. To that end, Doctor Anywhere has plans to introduce new services, forge strategic partnerships, and explore acquisition opportunities.
• Jakarta-based healthtech startup Klinik Pintar has raised US$5 million in a series A1 funding round led by Altara Ventures. Founded in 2018, the company manages clinics on a full-ownership and partnership basis, offering services such as doctor consultation, laboratory tests, and vaccinations. It is also helping over 5% of all clinics in Indonesia to digitize their operations through its software offering. Besides expanding its network of clinics, Klinik Pintar plans to develop a new hybrid product that will connect both its SaaS and physical models.
• Singapore’s Bitsmedia, which runs the Islam-centric lifestyle app Muslim Pro, has secured US$20 million in a series A funding round from Asia-focused venture capital firm Gobi Partners. Existing investors such as CMIA Capital Partners and Bintang Capital Partners also participated in the round. The company will use the funding to develop an AI-based search engine as well as to expand in the Middle East and North Africa.

The Battle for SEA’s Ecommerce Market

Alibaba has just poured US$634 million more into Lazada as its ecommerce arm faces intensifying competition in Southeast Asia from players like Shopee and Tokopedia. Just four months back, the Chinese internet giant injected US$845 million into Lazada. The new funding pushes the amount that Alibaba invested in its subsidiaries to US$1.8 billion. The fact that the Chinese titan is going all out in Southeast Asia to reign over the ecommerce landscape underlines the potential the region holds for Alibaba.

Alibaba’s timing seems to be pretty strategic. Just before it revealed the new funding for Lazada, short video giant TikTok had announced a merger agreement with Tokopedia under the latter’s existing entity.

TikTok will take a controlling stake in Lazada’s rival with a US$1.5 billion investment in the merged business. TikTok is acquiring a 75% stake in the Indonesian ecommerce platform without reducing GoTo Group’s stake in Tokopedia. The partnership—subject to regulatory approval—is expected to close in the first quarter of 2024. Under the agreement, the merged entity will operate the shopping features within TikTok’s app in Indonesia. GoTo—which was formed by the merger between Gojek and Tokopedia in 2021—will remain an ecosystem partner to Tokopedia through its financial and on-demand services.

TikTok forged this deal with lightning speed. It came just two months after the Indonesian government banned direct ecommerce transactions on social media apps which shut down its ecommerce arm in the country.

What Stood Out This Week

China autonomous driving technology company WeRide has obtained the M1 and T1 licenses from Singapore which will allow it to test its vehicles on a larger scale on public roads. With this, WeRide has become the first company to hold self-driving vehicle permits in the US, the United Arab Emirates, China, and Singapore, simultaneously. That Singapore has given licenses for self-driving vehicles shows the city-state’s focus on developing high-density autonomous public transportation.

After strengthening its presence in Singapore last week, Nvidia is eyeing Vietnam. The US-based chip-making giant is planning to establish a semiconductor hub in Vietnam, which will be a big boost to the country’s semiconductor industry. The development follows Nvidia CEO Jensen Huang’s visit to the country, where the chipmaker has invested US$250 million to date. This fits in perfectly with Vietnam’s bigger scheme of things that looks at benefitting from the US diversifying the chip design and manufacturing from China amid US-China trade tensions.

Meanwhile, Nvidia is collaborating with Malaysian conglomerate YTL to develop artificial intelligence (AI) infrastructure in the Southeast Asian country in a US$4.3 billion investment deal. Under the deal, the companies will join hands to build Malaysia's fastest supercomputers using Nvidia AI chips. Using Nvidia's AI cloud computing platform, YTL Power International will also build a large language model in Malay. The first phase of the partnership is expected to be operational by mid-2024.

Indonesia—Southeast Asia's biggest auto market—has relaxed tax rules on EV imports in an attempt to attract investments. The government will grant automakers tax incentives on their imports of completely built-up EVs until 2025. Those eligible for tax incentives include companies that have invested in EV plants, are planning to increase their EV investments, or planning to invest in one. The new rules will also remove the import duties and the luxury-goods sales tax on the built-up vehicles.

And that’s the wrap for this edition of

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