Funding in South-east Asia tech ecosystem falls to five-year low in Q3 2023: Traxcn


FUNDING continues to be challenging for startups in South-east Asia, as ecosystem funding falls to a five-year low for the third quarter of 2023 to US$835 million.

According to a report by market intelligence platform Traxcn, this low comes after a spike in the second quarter of 2023, when funding hit US$3.2 billion. Year on year (yoy), Q3 funding fell 66 per cent from US$2.5 billion.

But Indonesia has bucked the trend of decline in funding, recording an uptick on a quarter-on-quarter basis of 110 per cent to US$448 million in Q3 from US$213 million in Q2. On a yoy basis, Q3 funding fell 28 per cent from US$628 million.

Funding across seed, early and late-stage rounds fell in South-east Asia, with late-stage rounds dropping 57 per cent yoy to US$395 million in Q3 from US$922 million.

Early-stage rounds fell 75 per cent yoy to US$329 million in Q3 from US$1.3 billion. Seed-stage rounds fell 58.4 per cent to US$111 million in Q3 from US$267 million in the same quarter a year earlier.

The top funded sectors for the quarter were food and agritech, fintech and life sciences. Food and agritech funding fell 40 per cent on the year to US$248 million in Q3 from US$413 million.

Fintech funding dropped 74 per cent to US$236 million from US$874 million. Life sciences funding grew 584 per cent to US$119 million from US$17.4 million.

The region did not mint another unicorn for Q3 2023, according to data by Traxcn, while globally 11 unicorns were minted.

“Despite the challenges, there is considerable optimism in the region’s long-term growth, owing to factors such as the young population, a 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,” said Traxcn.