Venture capital firms in Southeast Asia anticipate an uptick in fundraising in 2024, contingent on tech firms demonstrating viable paths to profitability amidst global headwinds.
Venture Capital Funding Trends
In 2023, Southeast Asia witnessed a significant decline in venture capital funding due to global macro headwinds like inflation and high cost of capital. According to reports by Google, Temasek, and Bain & Company, private funding deployment in the region hit a six-year low.
Expectations for 2024
Industry veterans such as Peng T. Ong and Jussi Salovaara anticipate a potential resurgence in venture capital funding in the latter half of 2024. However, they highlight the necessity for tech companies to exhibit clear and viable paths to profitability to attract investments.
Path to Profitability
Tech firms have traditionally prioritized growth over profitability, leading to extensive cash burn in the initial years. With the current economic climate and global headwinds, there is a growing emphasis on prudent cost management and profitability, making it crucial for tech companies to adapt and optimize their strategies.