Southeast Asia faced a challenging year in 2024, marked by a “significant contraction” in funding, amid a weak global economy, a new report revealed.
According to Tracxn‘s report, prepared by industry analysts, the region’s tech ecosystem experienced a sharp decline in financial inflows and major shifts in the market landscape while “continuing to innovate and adapt to the challenges.”
SEA Tech startups raised $2.84 billion across 420 rounds in 2024 (YTD), a striking “59% decline from $7 billion in 2023 and an 80% fall compared with $14.2 billion in 2022.”
Late-stage investments were most impacted this year, plunging “76.9% to $948 million in 2024 from $4.1 billion in 2023.”
Seed funding reached $373 million in 2024, reflecting a “52.4% decline compared to $783 million in 2023.”
Early-stage funding amounted to $1.5 billion, registering a “28.6% decrease from the previous year.”
In H2 2024, the Southeast Asia startup ecosystem has secured “$1.1 billion across 133 deals, reflecting a 40.59% decline compared to $1.8B in H1 2024.”
This represents a 57% drop from the $2.4 billion raised in H2 2023. Q4 2024 recorded the lowest funding levels in five years, with “$494.8 million raised across 62 rounds, a 12.65% decrease from Q3 2024 and a 62.9% drop from Q4 2023.”
Among SEA cities, Singapore led funding activity, accounting for “nearly 67% of the region’s total funding, followed by Jakarta and Bangkok.”
Tech startups based in Singapore raised “$1.9 billion in 2024,” while those headquartered in Jakarta and Bangkok raised “$276 million and $261 million respectively.”
Neha Singh, Co-Founder of Tracxn, said:
“While 2024 has undeniably been a challenging year for Southeast Asia’s tech funding landscape, it has also highlighted the region’s resilience and unwavering commitment to innovation.”
Despite a decline in investments, sectors such as FinTech, CleanTech, and Blockchain remain at the forefront, fueled by “market evolution and robust government initiatives.”
This year serves as a reminder that setbacks can pave the way for adaptation, and the researchers are confident that Southeast Asia’s tech ecosystem will emerge stronger, “fostering growth and breakthrough technologies in the years to come.”
Despite the overall funding decline, certain sectors in Southeast Asia‘s tech ecosystem demonstrated resilience and continued to attract investor interest.
FinTech led the funding charts with “$1.4 billion raised in 2024, followed by High Tech at $966 million and Enterprise Applications at $764 million.”
Additionally, emerging industries such as CleanTech and Blockchain showed significant promise, fueled by “regulatory support and sustained interest from investors, signaling the potential for growth in the coming years.”
While overall acquisitions slowed to 63 deals, “down from 76 in 2023 (17% drop), notable transactions like PropertyGuru’s $1.1 billion acquisition by EQT and GHL’s $154 million acquisition by NTT reflected targeted consolidation efforts.”
Only one unicorn, Polyhedra Network, emerged in 2024 similar to one in 2023.
The number of IPOs, too, declined by over 50%, falling to 6 in 2024 from 13 in 2023.
Abhishek Goyal, Co-founder said:
“While 2024 witnessed a notable contraction in tech funding across Southeast Asia, the seeds of long-term growth are being sown. The demand for innovation in sustainability, digital transformation and strategic government initiatives along with investor confidence in high-potential sectors reaffirm that challenging times often serve as a catalyst for transformative progress, positioning the region for a dynamic 2025.”
SEA remained a hub for innovation in 2024, with Indonesia and Vietnam ranking among the “top five globally in crypto adoption.”
Singapore also reported a significant “increase in AI-related patents, which have grown by 50% over the past five years, demonstrating the region’s commitment to cutting-edge technology.”
Policies introduced by governments across the region “aimed to mitigate economic challenges” and support startup growth:
Singapore allocated SGD 440 million ($328.5 million) to its Startup SG Equity scheme to “foster deep-tech innovation.”
Malaysia unveiled the KL20 Action Paper to establish itself as a “global startup hub by 2030, backed by a $226 million National Fund of Funds.”
Vietnam launched a Digital Infrastructure Strategy targeting “nationwide 5G network coverage by 2030.”
Despite challenges, the SEA tech ecosystem demonstrated adaptability through “continued investment, innovation, and government support.”
The focus for 2025 will centre on “high-growth” sectors like FinTech, CleanTech, and Blockchain, alongside leveraging “policy frameworks and investor enthusiasm to navigate economic complexities.”