In recent years, South-east Asia's start-up ecosystem faces a funding gap, especially for later-stage ventures crucial for scaling operations.
While early-stage venture capital (VC) has thrived, private equity (PE) investments in mature firms have slowed due to economic uncertainties and market volatility. This has hindered companies from securing essential capital to expand geographically, hire skilled staff, and pursue strategic growth initiatives like mergers and acquisitions.
Despite Singapore, Indonesia, and Vietnam attracting significant private capital, VC funding rounds above US$25 million remain limited, comprising less than 9% of deals. Additionally, many VC firms are operating with only one fund, impacting the availability of investment for emerging enterprises. The region's private capital landscape, though robust in certain areas like software and consumer applications, struggles with achieving substantial cash returns and blockbuster exits.
Looking ahead, while Singapore's market resembles the US in structure and facilities, there's a call for more investor support for early-stage ventures. Amidst broader Asia-Pacific trends where PE deals have declined, South-east Asia is now seeking resilience through diversification into alternative asset classes like infrastructure and private credit for sustained growth.
Article by Angela Tan for The Straits Times. Read more here or in the PDF below.
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