Over the next couple of years, close to $1 billion of venture capital will invest in startups across Southeast Asia. This isn’t $1 billion of grants. This is neither a stockpile of subsidies nor a bunch of tax credits, nor other hogwash. This is $1 billion of venture capital cash investing in tech startups operating in Southeast Asia. Wow.
The number sounds stupid, but it’s legitimate. Rakuten Ventures unwrapped $100 million; Monks’ Hill raised $80 million; CyberAgent Ventures announced a $50 million fund. And the list goes on. 2016 is going to look like 2015 with Rocket Internet on steroids. Imagine.
Some observations and hypotheses:
1) I suspect that the number of Series A investments will spurt across the region. Most funds will focus on Series A and there are numerous startups in Southeast Asia fit for Series A. The market also appears increasingly willing to write $1-2M checks - perfect for a Series A!
2) The biggest slice of the funding cake will be gobbled up by Singapore and Indonesia. For better or worse, investors will focus on these 2 countries for the foreseeable future - the former for transparency and access to syndications; the latter because it’s simply outrageously big.
3) Valuations will rise because there's so much capital flowing in! All that competing money will drive prices up and raise startup valuation.
4) A proliferation of the Seed+ round will occur, most likely to help bridge the gap between pre and post revenue operations. This could be used for hiring a sales team, testing marketing campaigns or simply polishing up a product/service.
There is a paradigm shift in technology adoption, funding and startup formation in Southeast Asia. It's riveting to see the amount of money and confidence flowing into the region. It's even more heartening to witness improvements in the calibre of early stage ventures receiving funding in the region. Seems like a bloody great time to be an entrepreneur in Southeast Asia.