Southeast Asia’s tech investment landscape continues to flourish with an increase of 17 per cent in the number of deals between H1 of 2019 and 2020, as says the ‘e-Conomy SEA Report’, jointly conducted by Google, Temasek and Bain & Company.
The total deal value declined slightly from US$7.7 billion to US$6.3 billion, over the same period, attributable to the slowdown in big-ticket unicorn investments, reveals the study.
This has meant smaller, non-unicorn investments which continue to grow, made up more than half (53 per cent) of the total deal value, against 34 per cent the preceding year.
According to the study, titled ‘e-Conomy SEA 2020. At full velocity: Resilient and racing ahead’, the deal value in the fintech sector surged to US$835 million in H1 2020, from US$475 million in H1 2019. Overall, there was a 24 per cent increase in the number of deals during this period.
Funding for unicorns in mature sectors such as e-commerce, transport & food, travel and media decreased from US$5.1 billion in H1 2019 to US$3 billion H1 2020. Platforms are now refocusing on their core business and established strengths in order to prioritise a path to profitability.
The region’s digital economy remains strong and resilient despite the headwinds. The adoption and usage of e-commerce, food delivery, and online media have surged.
Fintech solutions are set for a tailwind in the long run as consumers and small and medium-sized enterprises (SMEs) have become more receptive to online transactions.
Owing to the surge in digital adoption by customers and businesses, digital payments continue to see growth from US$600 billion in 2019 to US$620 billion in 2020 and is expected to reach US$1.2 trillion by 2025.
As per the findings of the report, the hardest-hit sector in the region is online travel. There are, however, signs of recovery in domestic tourism. Online travel is expected to bounce back to US$60 billion by 2025.
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