Seed-stage funding in Southeast Asia, which has so far been relatively resilient amid the funding winter, is now starting to feel the chill.
Data from DealStreetAsia DATA VANTAGE’s SE Asia Deal Review: Q2 2023 report show that there was a fall in the volume of seed-stage deals in the second quarter and first half of 2023.
Only 52 startups in Southeast Asia secured seed funding in Q2, marking a 29.7% decrease sequentially and a 45% plunge year-on-year. In H1 2023, there were 126 seed deals—down 43% from the same period of 2022.
Apart from the minor bump in Q1 2023, seed funding volumes have been moving south since their peak in Q1 2022.
This trend “raises concerns as seed funding plays a crucial role in helping startups get off the ground, covering essential expenses like product development, key personnel recruitment, marketing, and early-stage operations”, the report noted.
Median value dips
The median value of seed funding rounds in H1 2023 amounted to $2.2 million—a decrease from $3 million recorded in the same timeframe last year. “This decline [in median value of seed deals] signals that seed-stage valuations are no longer shielded from the liquidity crunch and marks the end of a gradual increase in seed-stage median value observed since at least 2018,” notes the report.
Series A is the only round that saw recovery in the median deal value based on six-month data. It is up to $9.4 million from $8.1 million in H1 2022 and $7.5 million in H1 2021. “Despite this, it remains too early to tell whether Series A valuations have recovered,” the report warned.
Meanwhile, Series C median value fell 62.5% YoY to $30 million in H1 2023.
The SE Asia Deal Review: Q2 2023 report covers fundraising by startups in the second quarter and the previous quarters. It covers:
- Funding trends across quarters, sectors and countries
- Deal volume and value across funding stages
- Median and average deal value across stages
- Investor perspectives, and more.
The SE Asia Deal Review: Q2 2023 report is available exclusively to DealStreetAsia – DATA VANTAGE subscribers. Subscribe/upgrade your subscription now to access our entire set of reports.