In the dynamic realm of Asia-Pacific (APAC) venture capital (VC) investments, the first half (H1) of 2023 brought forth a notable departure from the norm. GlobalData, an analytics company, has observed a strategic shift in investment trends as billion-dollar VC deals vanished amidst a backdrop of market volatility, changing investor sentiments, and sector-specific intricacies.
According to an analysis of GlobalData’s Financial Deals Database, H1 2023 witnessed a decline in VC funding deals across all sizes, with a total of 2,025 deals disclosed in the APAC region. This represents a significant 37.7% decrease from the 3,253 deals reported in H1 2022.
Lead Analyst at GlobalData, Aurojyoti Bose, points out, “Similar to the global trend, the APAC region experienced a decline in deal volume across all funding sizes in H1 2023, influenced by cautious investor sentiment in the face of a volatile market.”
Interestingly, the absence of billion-dollar deals wasn't confined to H1 2023 alone; such high-value deals were also missing in H1 2022. Furthermore, the count of high-value deals (those exceeding $100 million) decreased notably in H1 2023 compared to the previous year.
This decline in high-value deals was steep, dropping by 53.6% year-on-year (YoY) from 112 to 52. These high-value deals contributed to a mere 2.6% of the total number of VC deals with disclosed funding in the APAC region for H1 2023.
Bose elaborates on the situation, stating, “The conspicuous absence of billion-dollar deals and the reduction in high-value deal volume highlight a strategic adjustment within the VC investor community. This recalibration is in response to the intricate interplay of market volatilities and sector-specific dynamics.”
The landscape saw low-value deals dominating, accounting for a significant 66.1% of the total number of VC deals with disclosed funding in H1 2023. The volume of these low-value deals decreased by 32.9%, going from 1,997 to 1,339.
Meanwhile, mid-size funding deals (ranging from over $10 million to $100 million) also experienced a YoY drop of 44.6%, falling from 1,144 to 634 deals. Despite this decline, these mid-size deals still comprised 31.3% of the total number of VC deals with disclosed funding for H1 2023 in the APAC region.
As investors tread through uncertain terrain, the absence of high-value transactions prompts both investors and observers to delve deeper into the evolving factors that are reshaping the regional investment panorama.
