Venture capital fundraising in between January and March 2020 fell 47 percent compared to the fourth quarter of 2019, with Singapore and Indonesia VCs dominating.
Venture capital funds focusing on Southeast Asia accumulated $1.33 billion in capital commitments in the past quarter, triple the amount year-on-year, but 47 percent down from the previous quarter's $2.5 billion, and ending a four-quarter growth streak, according to «Dealstreet Asia.»
Singapore and Indonesia remain the region's VC fundraising markets of choice, with total fund closings of $865 million and $161 million respectively, the publication said in its «Southeast Asia’s VC Funds: Q1 2020 Review,» released Wednesday.
The top three VC firms in Singapore were B Capital ($600 million), Vickers Venture Partners ($200 million) and Credence Partners ($50 million), while BRI Ventures ($136 million), OCBC Ventura NISP ($15 million) and Indogen Capital ($10 million) led the way in Indonesia.
Shrinking Appetite
According to the report, the Q1 figures do not reflect the full extent of the impact of Covid-19, as the capital committed by investors took place before the region began to tighten social distancing measures and impose travel restrictions in April.
There are 53 VC firms currently in the market to raise $8.4 billion for Southeast Asia-focused funds, with about 30 percent secured so far. However, the past quarter's poor fundraising performance is expected to continue as investor appetites shrink as result of the Covid-19 pandemic, the report said.
Ample Dry Powder
In total, Southeast Asia-focused VCs have about $5.8 billion of committed capital, based on funds that reached a final close in the past four quarters. However, fund managers are likely to be more careful about deploying their dry powder, given the challenging outlook, which could affect startup valuations, the publication said.
