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Startup investments in Southeast Asia nearly double despite COVID

SINGAPORE — Investment in Southeast Asian startups jumped in the April-June quarter despite headwinds from the coronavirus pandemic, led by e-commerce and fintech companies that gained momentum as COVID-19 reshapes home and the workplace.

According to data compiled by Singapore-based startup information platform DealStreetAsia, the value of fundraising deals in the region rose 91% on the year to $2.7 billion, while the number of transactions climbed 59% to 184 for the three months through June, up from 116 in the same period a year earlier.

During the quarter, many countries were under lockdown, which limited deal making opportunities. And uncertainty dampened sentiment among some investors. But others put cash on the table. “A significant amount of capital was raised by various venture capital funds last year,” Kuo-Yi Lim, co-founder and managing partner at Singapore-based Monk’s Hill Ventures, which invests in the region’s startups, told the Nikkei Asian Review, pointing out that most deals were in the pipeline from early in the year.

Since the mid-2010s, Southeast Asia’s startup funding boom has been led by Singapore’s Grab and Indonesia’s Gojek, the two big ride-hailing companies in the region. In the first quarter of 2020, they together raised more than $2 billion, about 70% of the regional total.

Data for the latest quarter paints a different picture: Leading the region were the e-commerce sector, which raised $691 million, logistics, at $360 million, and fintech at $496 million. Some locally operating companies also pulled in considerable funds, indicating the pandemic has created opportunities for a broader range of new companies.

The biggest capital raiser for the quarter was Indonesian e-commerce unicorn Tokopedia, which secured $500 million from Singapore state investment firm Temasek Holdings, as reported by DealStreetAsia.

Tiki, a Vietnamese e-commerce company, raised $130 million in a deal led by private equity fund Northstar Group. It saw “significant growth in customers’ shopping needs [during the pandemic], especially for face masks, hand washes and necessities,” according to Ngo Hoang Gia Khanh, Tiki’s group vice president for corporate development.

Competition in Vietnam’s e-commerce business is heating up among both local and regional players, but Tiki differentiates itself with its unique services. Using a nationwide network of order fulfillment centers, it offers an express delivery service called TikiNow. The service ships parcels to the customer within two hours of receiving an order, which is faster than rivals, Tiki says. It also offers free, immediate installation for heavy and bulky items.

As demand for online shopping grows in Southeast Asia, logistics and delivery startups have also picked up steam. Singapore’s Ninja Van in May announced a $279 million fundraising round, and Indonesia’s Kargo Technologies pulled in $31 million.

Fintech also has rising stars. Voyager Innovations, the company behind Philippine mobile payment app Paymaya, raised $120 million in April from existing shareholders, including U.S. private equity fund KKR and Chinese tech giant Tencent Holdings. The funding round, its first since 2018, gave the company additional financial muscle to compete with domestic rival Mynt, which is backed by Alibaba Group Holding.

The fundraising came as demand for digital financial services exploded in the Philippines amid the lockdown. In the six months through June, Paymaya reported a 150% on-year increase in transaction volume, helped by mobile payments and remittances. The company also helped distribute government cash handouts to Filipinos.

In Myanmar, Digital Money Myanmar, known for its Wave Money brand, announced in May that China’s Ant Financial Group, operator of Alipay, will invest $73.5…

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