Southeast Asia’s tech companies attracted a stellar $5.7 billion in venture capital in the first three months of the year (Q1), way up from $991 million in the same period in 2019, according to KPMG data seen by Technode Global.

The $5.7 billion tally came from just 92 deals (average: $62 million) across the region, skewed by large investments pulled in by ride-hailing giants Grab and Gojek.

Southeast Asia tech funding in past year:

  • 2019 Q1 = $991.44 million
  • 2019 Q2 = $5.8 billion
  • 2019 Q3 = $1.15 billion
  • 2019 Q4 = $806.84 million
  • 2020 Q1 = $5.69 billion

Grim outlook

Across Asia as a whole, VC funding plunged from $23.8 billion to $16.5 billion in the first three months of the year, which KPMG says is because China, the continent’s biggest tech player, was the area first hit by Covid-19.

Southeast Asia will likely follow that pattern in Q2 as the lockdowns finally bite.

Given all the pandemic travel restrictions that hamper VC’s usual face-to-face networking and vetting procedures, “deal-making processes globally are expected to slow considerably in Q2,” says Kevin Smith, co-leader at KPMG Private Enterprise Emerging Giants Network. “VC deals that do occur will likely focus on follow-on funding to companies within a VC investor’s current portfolio—and on companies that speak to a specific need in the current situation, such as productivity solutions, edtech, and logistics and delivery.”

That tracks with what Thomas Tsao, chairman of Gobi Partners, one of the most active tech investors in Southeast Asia, told us recently: that all the deals he’s recently announced were already negotiated and sealed before the lockdowns, and he’s not done any deals with startups that are brand-new to him.

Early-stage startup founders take note: we have four online pitch sessions with big-name VCs scheduled in May and June.

See: Here’s what happened at our first Southeast Asia online pitch session