VC’s investor financing in technology -based companies decreased by about 79 % between 2022 and 2024, from about $ 10.1 billion to about $ 2.2 billion, according to the Tracxn data intelligence platform.
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Investment capital usually have a strong appetite for risks, but some investors in Southeast Asia are increasingly cautious.
Aaron Tan, co -founder and CEO of the used auto market, said, ” CNBC.
He added that some VC investors in the region now choose “safe bets” that show profitability, instead of high -growth start -up startups.
“I see a lot of investments these days-which worries me a little-(in) what I (I think) is not companies that can abandon adventure, because … they are in a situation of non-communication in nature.”
Investment capital or private stocks?
This shift has become more clear over the past two years, as some investment capital investors have moved their focus from emerging companies in the most dangerous early stages to the most exciting companies that are more firmly, according to the informed.
Currently, adventure boxes have become PE boxes.
Aaron like this
Participant founder and CEO, Caro
“At the present time, the PE’s adventure boxes have become,” said Caro Tan. He added that some VC investors walk for 3X or 4X revenues, which is considered more typical in private property rights, rather than aiming to achieve 100x returns, which is traditional for investment capital companies, which is more typical in private stocks.
Jeremy Tan, co -founder and partner in Tin Min Capital, told CNBC: “You see a lot of investments through traditional VC money in what I call bricks and mortars,” CNBC told CNBC.
“At best, they are companies that support technology, right? Through it, I mean that you have an application, you have a loyal interface, but then, (you) are still preparing material stores (are you still) (are you still) mainly, can they provide the profile of return itself?
From logistical services companies, restaurant chains, stores and even farms, some VC investors have allocated more capital for traditional sectors and companies, but without the war box or the type of model operational participation of private stock companies.
In Southeast Asia, investment capital investments have decreased since 2022. VC’s investor financing in technical companies has decreased by about 79 % between 2022 and 2024, from about $ 10.1 billion to about $ 2.2 billion, according to the Tracxn data intelligence platform.
Meanwhile, financing by VC investors decreased to companies not connected to the sector-based sector-and if it was less than 61 % in the same period, from about $ 1.3 billion to about $ 527.7 million, according to Tracxn.
Struggle startup in Southeast Asia
All this comes against the background of the ecosystem that was going Through grapes.
Industry people say that many startups in the region are still unanimous. Meanwhile, many money in Southeast Asia collected a lot of money and did not provide suitable returns for its investors, also known as Limited Partners.
“A lot of VCS collected a lot of money, right? So I have run out for publishing, and I think they are only trying to know how to achieve a return for their investor, for the sake of LPS,” said Tan Capital Tan.
Moreover, “the macroeconomic economy is very weak, whether in Indonesia, whether in Thailand, whether in Singapore … (and) there is a clear shortage of exits in this part of the world,” said Caro Tan.
The exits – which provide investors as a way to withdraw their money and profit from their investments – were rare in the region. Caro Tan said that many Southeast Asian companies that included a “faded” list did not provide “faded” exits for investors at best.
“In fact, there are not many good deals to be made in this part of the world,” said Caro Tan. He added that many startups remain indifferent, and the evaluation correction has not yet occurred.
“Many money here has suspended their hopes of public subscription,” said Tan Tan in Tin Min Capital Tan. However, the disturbances in the last market have led to many startups Delay their general lists.
Emerging companies that serve Southeast Asia also face unique challenges as the economy is a grouping of different countries in different languages, cultures, organizational environments and more. “So, the possibility of building large companies (in the region) is much lower than the United States,” indicated by Ten Min Capital.
Therefore, as a result, investors ask: “Where is the money? “… which, at the end of the day – the issue we have at hand is that LPS (limited partners) are not interested in investing at the present time,” said Caro Tan.
The road forward
Meanwhile, some investors say that companies operating on the Internet, the Internet, or atoms and deciding respectively are the best competition.
“We believe that companies in Southeast Asia that have a real trench (sustainable competitive advantages) are atoms,” said Yenglan Tan, the founding administrative partner at Insignia Ventures Partners.
Insignia Tan said: “If you are a pure business, I think there is not much trench against major software companies such as Microsoft and Facebook, but if you have … logistics, local licenses, you have local trenches that are not connected to the Internet, you are generally more flexible in external competition.”
In other words, companies that have online assets may be both more flexible compared to companies that depend only on one.
There is one way to do this is to find what can be seen as a traditional work, but artificial intelligence (injection) in it, to make it more efficient, increase margins, improve revenues, open new products, and online experience that is not connected to the Internet. “
“I claim that the era of finding only and negative investment has ended. You need to create participation.”
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