VC funding hits slump in APAC

VC funding hits slump in APAC

VC deals with disclosed funding down 28.9 per cent during first half of 2023.

Credit: Dreamstime

The Asia Pacific venture capitalist market appears to be hitting a funding slump as the tech industry “recalibrates”. 

According to analyst firm GlobalData, a total of 2,445 VC deals with disclosed funding rounds were announced during the first half of 2023, a year-on-year decline of 28.9 per cent over the 3,439 VC deals previously announced. 

The analyst found that early-stage, known as Seed and Series A funding rounds, felt a funding decline, alongside growth, expansion and late-stage rounds, from Series B onwards. 

However, GlobalData claimed, the impact was more prominent for growth, expansion and late-stage rounds. 

“As the APAC VC landscape undergoes shifts, the decline in both early-stage as well as growth, expansion and late-stage funding rounds in H1 2023, coupled with the conspicuous absence of late-stage rounds, reflects a strategic shift,” said Aurojyoti Bose, lead Analyst at GlobalData, 

"These dynamics underscore the adaptability and evolving strategies of investors, paving the way for a recalibrated industry outlook.” 

GlobalData’s Financial Deals Database revealed that the total volume of early-stage funding rounds declined by 26.8 per cent from 1,867 to 2,551. Meanwhile, the total number of growth, expansion and late-stage funding rounds decreased by 34.9 per cent from 888 in H1 2022 to 578 in H1 2023. 

Bose also noted an absence of late-stage funding rounds, including Series H, Series I and Series J, within the APAC region, in the first half of this year.  

In 2021, GlobalData reported that VC funding financing had reached US$19.5 billion in APAC during the year's second quarter.

In 2019, Australia hit a record $1.2 billion (US$899 million) of VC funding with US$147 million of start-up investment pumped into the market with software firm Deputy scoring the most with US$81 million in Series B funding.

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