With the recent release of the Google e-Conomy SEA 2020 Report on investment trends in Southeast Asia, investors are cautious, yet optimistic, about the financing scene.
One example of continued growth is in Vietnam. While already burgeoning in 2019 with $362.5 billion USD in investments, the country has remained relatively stable with funding in the region of $337.9 billion USD as of June 2020.
The healthtech and edtech sectors in Southeast Asia also flourished throughout the region during 2020. Neighbouring countries, India and China remained in the lead in the levels of funding, yet Southeast Asia accounted for 21% of financed projects, with many digital platforms such as contract tracing apps, symptom checking websites and mergers between existing healthcare providers making up the bulk of financed projects.
With the US-China trade war in its third year and the election of Joe Biden as a possibly more mollifying influence on the two countries’ trade relations, Southeast Asian economies may benefit from a more normalised partnership between China and the United States.
Indeed, at the time of writing, Southeast Asian countries, neighbouring nations and China have just signed a landmark trade deal through the Regional Comprehensive Economic Partnership (RCEP). While the global economy could grow by as much as $186 billion USD, Southeast Asian countries are likely to dually benefit from both their COVID-spurred eCommerce economies and their new relationships with China. Under the new partnership, there will be a reduction in tariffs between participating countries over 20 years.
Overall, the e-Conomy SEA 2020 Report and related research indicate that the current investment trends in Southeast Asia will continue to grow. Although unicorns and other large startups are now refocusing on their basic services – and may lag behind smaller companies – most areas of investment, particularly sectors that sowed the opportunities afforded by COVID-19, will be likely to produce a healthy, robust investment ecosystem for the region.