Southeast Asian startups raise close to $26 billion in equity and debt funding in 2021, nearly three times the sum they secured in 2020 and 2019, according to DealStreetAsia’s calculations. The region also recorded 1,000 transactions in 2021, a 50% jump over the previous year.
Quest Ventures managing partner James Tan said some companies in Indonesia command the same valuation as their counterparts in China. He calls this “unrealistic” as the Southeast Asian country is comparatively much smaller and less developed.
One may assume the impending US rate hike could make for more conservative investors. But, Quest Ventures’ Tan says, the relationship between interest rates and valuations of private startups are tenuous. Valuations will only be “pressured lower when VCs stop following the pack and investing in a FOMO manner.”