HealthTech, EdTech, and blockchain has led the pack with 5-year funding contributions in Southeast Asia (SEA), Tracxn said Wednesday.
The software as a service (SaaS)-based market intelligence platform said in a statement that based on its five-year analysis, the HealthTech, EdTech, and blockchain technology sectors have prominently led the way in securing significant investments based on several factors.
According to the statement, HealthTech startup ecosystem in Southeast Asia has seen an unprecedented surge in funding, peaking at $515 million in 2023.
This growth is primarily driven by an increase in early-stage investments, which attracted a total of $308 million.
Over the last five years, the sector has garnered $1.5 billion in funding, contributing more than 87 percent of the total funds raised in this space to date.
Notable companies such as Halodoc, which secured $245 million, Doctor Anywhere with $172.3 million, and HealthifyMe raising $105 million, have significantly contributed to this growth.
The average time taken for a HealthTech startup to raise seed funding since founding stands at 2.8 years.
Post-pandemic, the funding in HealthTech has increased steadily, reaching its peak in 2023.
However, other top segments in this space, such as Healthcare Booking Platforms, Employee Health IT, and Fitness & Wellness Tech, saw a notable increase only in 2021, after which funding started to decline.
Meanwhile, insurance technology (InsurTech) has gained significant momentum in the SEA region, driven by ongoing digital transformation initiatives, according to Tracxn.
With various industries embracing digital payments as part of fintech solutions, InsurTech has emerged as a vital subset, integrating seamlessly with other services.
This convergence enables the development of all-in-one platforms that effectively tackle challenges such as premium payments.
The InsurTech landscape in Southeast Asia has demonstrated remarkable growth, particularly in 2023, when total funding reached a peak of $492 million.
This year alone saw Bolltech contributing significantly, raising $246 million in just two funding rounds, accounting for 50 percent of the total funding.
The InsurTech sector has amassed a total of $1.8 billion till date, with an impressive 80 percent of this amount raised ($1.47 billion) in the past five years.
This indicates a strong upward trajectory in investment, reflecting heightened interest in innovative insurance solutions.
On average, startups in this space take approximately two years and six months to secure seed funding since their founding.
The top funded sub-sectors include Internet First Insurance Platforms, Insurance IT, and Employer Insurance, with the former consistently increasing in funding since 2021, culminating in its highest levels in 2023.
Key players driving this growth include Bolttech, Singlife, and Qoala, underscoring the sector’s potential and resilience in the evolving landscape of Southeast Asia’s tech ecosystem.
The education technology (edtech) sector, on the other hand, is thriving in Southeast Asia, particularly with the proliferation of online learning platforms, said Tracxn.
Responding to the growing demand for quality education, startups such as Ruangguru in Indonesia and Snapask in Hong Kong are offering accessible and personalized learning experiences.
The incorporation of technology into education is transforming traditional learning methods.
The EdTech sector in SEA experienced its peak funding in 2021, with a total of $980 million raised.
This aligns with global trends, as the pandemic accelerated the adoption of EdTech solutions.
However, 66 percent of the funding raised in 2021 was due to a significant $650 million funding round by Emeritus.
Additionally, 88 percent of the funding in 2021 was raised by just three companies: Emeritus, Ruangguru, and Lingoace.
Notably, none of these companies have managed to raise equity funding post-2021.
Over the past five years, the sector has maintained a high overall contribution, accounting for 94.5 percent of the total funding, though there has been a sharp decline since 2021 as the demand for remote learning solutions waned.
The average time taken for an EdTech company to raise seed funding since its founding is two years and 11 months.
Despite this, sub-sectors such as Continued Learning, K-12 EdTech, and Higher Education Tech have remained the highest funded, although they have not seen recent growth.
Although there has been a decline since the peak year, the Edtech sector continues to play a crucial role in transforming education in the region.
According to Tracxn, blockchain technology in the SEA region witnessed its peak funding in 2022 with $2.3 billion raised.
Although funding declined sharply in 2023, 2024 year to date has seen a notable recovery with $463 million raised, already exceeding the total funding of 2023.
Over the past five years, 87 percent of the sector’s funding was raised with $4.1 billion.
The average time for blockchain startups to secure seed funding since founding is one year and five months.
Top-funded segments include cryptocurrencies, blockchain infrastructure, and blockchain services, with both blockchain infrastructure and blockchain services seeing
increased funding in 2024 compared to the previous year.
Amber Group leads the sector with $628 million raised, followed by Sky Mavis with $311 million and Axie raising $161 million.
Other notable sectors include energy tech which has been increasing steadily since 2021, peaking in 2023 with a notable focus on electric vehicles and energy storage segments.
This was due to increasing emphasis on climate change and the push towards alternate modes of transportation that has increased demand for EVs and efficient energy storage solutions for harvesting renewable energy.
The gaming sector, too, has seen a resurgence in 2024 year to date, with a 145 percent increase in funding compared to 2023.
The gaming industry has been gaining popularity in this region owing to rising affordability and penetration of smartphones combined with government support through regulations such as recognition of Esports as an official sport in Indonesia to promote this sector.
“The growing tech sectors in Southeast Asia are indicative of the region’s vibrant and dynamic economic landscape,
“The SEA tech startup ecosystem continues to evolve, with significant funding trends observed by the major contributions from HealthTech, EdTech, and blockchain
technology,” Tracxn said.
“While some sectors have seen a decline post-pandemic, others like energy tech and gaming are witnessing renewed investor interest,
“As the region leverages its strengths and navigates challenges, it is poised to become a vibrant hub for innovation and investment in the global tech landscape,” it added.
Tracxn : SEA FinTech startups funding drops 25 percent in first half