Ride-hailing firms get most of funding for S-E Asia's Internet economy
Ride-hailing companies have taken home the lion's share of investor money for South-east Asia's Internet economy, amid competition in recent years to become the region's first "super app".
Almost 70 per cent of funding from 2016 to the first half of this year went to companies in ride-hailing and e-commerce, the latest report by Google, Temasek and Bain & Company revealed yesterday.
However, a funding gap for aspiring unicorns may be of concern, experts said.
Ride-hailing firms took home the largest sum of more than US$14 billion (S$19.3 billion) in four years, with leading players Grab and Gojek staging mega financing rounds to build up food delivery and financial services.
Both have also acquired new ventures and started acting as investors in the ecosystem.
E-commerce has drawn US$9.9 billion in investments since 2016 and raised US$2.5 billion in the first half of this year, keeping close to its pace in the same period a year ago.
While the fintech sector saw a spike in investment, most of which went to payments and lending businesses, funding to other sectors such as online media has slowed.For now, the bulk of funding has continued flowing to the biggest tech firms in the region, said the report.
Unicorns, valued at over US$1 billion, attracted US$24 billion out of the US$37 billion raised in the four years.
But the report also found that even though nearly 70 aspiring unicorns, valued at between US$100 million and US$1 billion, have raised US$5 billion since 2016, more late-stage funding is needed for them to scale up.
This refers to investments ranging from US$25 million to US$100 million and above.
To attract them, such aspiring unicorns, including cashback platform ShopBack and logistics provider Ninja Van, have to prove they can rapidly grow and monetise services. - THE STRAITS TIMES