Asia-Pacific Investment: Challenges & Opportunities in 2023
The Asia-Pacific region's investment landscape has seen both challenges and opportunities in recent months. Despite fundraising difficulties and reduced diligence, the Asia-Pacific Sustainability Seed Fund (SSF) 2.0 was launched with a USD 5 million initiative. Meanwhile, iPeakoin, a digital banking company, successfully closed its Series A funding round, raising nearly USD 10 million.
The SSF 2.0 aims to support non-profit organizations leveraging technology to tackle climate and sustainability issues. This comes amidst a backdrop of increased fundraising challenges, with 87% of investors reporting difficulties and 64% observing reduced diligence and top-of-funnel activity.
Despite these hurdles, private equity and venture capital funds committed USD 15.7 billion in 2022, surpassing the previous year's USD 12.4 billion. However, the financing situation in the region has been challenging, with cautious investment approaches and underweighting of emerging market equities. A potential turnaround is anticipated, with China's central bank announcing a comprehensive stimulus package in late 2024.
In 2021, there were 2,697 deals that amassed USD 27 billion in funding. However, private funding in digital economy-related sectors has regressed to 2017 levels in the first half of 2023, with only 564 deals securing USD 4 billion. Mirae Asset launched two new ETFs on the Hong Kong Stock Exchange, while BusCaro, a Pakistan-based local transportation startup, secured USD 1.5 million in a pre-seed funding round. Antler invested in 15 startups across Singapore and Indonesia, with each startup securing around USD 125,000 in pre-seed funding.
The Asia-Pacific region's investment scene continues to evolve, with both challenges and opportunities presenting themselves. While fundraising difficulties persist, initiatives like the SSF 2.0 and successful funding rounds like iPeakoin's Series A demonstrate the region's resilience and potential for growth. As the region navigates economic headwinds and anticipates a potential turnaround, investors and startups alike remain optimistic about the future.
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