VC and PE activity has fallen sharply in 2020 in SouthEast Asia.

The pandemic has changed everything.

VC and PE activity has fallen sharply in 2020 in SouthEast Asia. | BEAMSTART News

Venture Capital (VC) and Private Equity (PE) activity in SouthEast Asia has fallen sharply in the first half of 2020.

In the first quarter of 2020, both VC and PE firms invested a total of $1.4 billion across 141 deals in the region, 20% lower than the previous quarter (Q4 2019), which was $1.8 billion.

Compared to the same period in 2019, both VC and PE funding volume fell by over 65%.
PE and VC investment activity. Source: EY.

Fundraising activity has seen a drop as well — with both VC and PE firms raising a total of $1.3 billion in funds in Q1 2020, 11% lower than the same period last year. 

This amount is less than 10% of what was raised in the previous quarter (Q4 2019), where VC and PE fundraising totalled to $13.5 billion.

PE and VC exits. Source: EY.

With the pandemic devastating the global economy, analysts are expecting 2020 to be a very different year for both VC and PE industries, especially for exits.

Most investors have been focused on dealing with pandemic-related issues, such as liquidity, protecting staff, and making short term adjustments to the business activities to weather through the storm.

“We expect to see activity in the areas of structured finance, public to private, capital recycling, non-core divestments, and sector and segment consolidation,” said Luke Pais, Head of EY’s ASEAN M&A and Private Equity practice.

While things are starting to take a turn towards recovery, it will take a while before things return to the way they were before.

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