Data & Intelligence

The Rise of Southeast Asia as the Next Fast-growing VC Market

Michael LintsVenture Partner
Golden Gate Ventures

Golden Gate Ventures recently concluded a study about the rise of Southeast Asia as the next fast-growing VC market. China became the region’s first pillar of internet start-up growth in 2005, when regulations were lifted that prevented privately-owned companies from entering a number of economic sectors. This accelerated the growth of a powerful private sector in the Chinese economy. India, the second-fastest growing economy in the world, soon became the second pillar. Now, Southeast Asia is showing all of the signs of being the next blockbuster economy. Based on our analysis, Southeast Asia will at least double the number of Series A investments in 2016 to forty, and reach an aggregate Series A investment of at least US$120 million (compared to an estimated US$83 million the prior year). The reason the number of Series A investments is growing is a previous focus on seed deals in the region. Government grants, incubators, accelerators, university programs and a growing number of angel investors have catalyzed the number of start-ups and seed investments. A percentage of those companies that received early investments are expanding locally and in the region, thus raising more consecutive rounds of funding.

During fundraising for our second fund, we found LP sentiment to be positive to very positive, especially in Southeast Asia, Japan, South Korea and Europe. Strategic and institutional investors were more open to invest in smaller funds that also provided access to deal flow.

What excites me about the Southeast Asian region is the close collaboration between founders and VCs. As founders try to solve local, regional and (in some cases) global problems, VCs provide a network, expertise and (in many cases) a sounding board to support these start-ups in their efforts.   


Read More Views from the Field: Assessing the State of Venture Capital in Emerging Markets:
 

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Aavishkaar │ Noshir Colah │ Operations Partner

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Accion │ Tahira Dosani │ Director of Portfolio Engagement, Venture Lab

GP Interest in EM VC, in Addition to a Developed Markets VC Portfolio
Amadeus Capital Partners │ Pat Burtis │ Partner

Key Drivers for Success and Challenges for the Development of an Entrepreneurial Ecosystem
Dalberg │ CJ Fonzi │ Senior Project Manager

Why LPs Should Be Paying Attention to VC in Southeast Asia
Digital Media Partners │ Dmitry Levit │ Partner

The Rise of Southeast Asia as the Next Fast-growing VC Market
Golden Gate Ventures │ Michael Lints │ Venture Partner

Evaluating the State of the VC Market in Turkey
idacapital  │ Cem Baytok │ Managing Partner

Drivers for Increased Interest in Fund Investing and Direct Investing in EM VC
International Finance Corporation │ Nikunj Jinsi │ Global Head, Venture Capital

Examining the State of the VC Market in China
Pantheon │ Jie Gong │ Partner

VC Opportunities and Challenges in Sub-Saharan Africa
TLcom │ Maurizio Caio │ Founder and Managing Partner

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